ASST CIT 18(3), MUMBAI V. SUMIT J JAIN, MUMBAI

ITA 145/MUM/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9963 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 06-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Assessee Lawyers: MANI JAIN AW SHRI PRATEEK JAIN
• Keywords: Unexplained cash credit; Bogus loan
• Section: 143(3); 133(6); 147; 68

Judgement Text

, , - , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC , MUMBAI , BEFORE SHRI JOGINDER SINGH, J UDICIAL M EMBER ITA NO. 145 /MUM/20 17 ASSESSMENT YEAR: 20 09 - 1 0 ACIT, CIRCLE - 18(3) ROOM NO.609, 6 TH FLOOR EARNEST HOUSE, NARIMAN POINT, MUMBAI 400 021 / VS. SHRI SUMIT J. JAIN 453 - E, 2 ND FLOOR CHIKAL HOUSE KANDIVALI ROAD MUMBAI 400 002 ( /ASSESSEE) ( / REVENUE) P.A. NO. ADEPJ9200A / ASSESSEE BY SHRI MANI JAIN A/W SHRI PRATEEK JAIN / REVENUE BY MS. N. HEMALATHA / DATE OF HEARING : 1 3 /0 2 /2018 / DATE OF ORDER : 1 2 /0 3 /2018 / O R D E R PER JOGINDER SINGH ( JUDICI AL MEMBER ) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 24.10.2016 , OF THE LD. FIRST APPELLATE AUTHORITY, MUMBAI , DELETING THE ADDITION OF RS. 40,00,000 MADE SHRI SUMIT J. JAIN ITA NO.145/MUM/2017 2 U/S 68 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) ON ACCOUNT OF UNSECURED LOAN FR OM THE PERSON ENGAGED IN PROVIDING ACCOMMODATION ENTRY . 2. DURING THE HEARING, THE LEARNED D.R., MS. N. HEMLATA, DEFENDED THE ASSESSMENT ORDER AND CONSEQUENT ADDITION MADE THEREIN. ON THE OTHER HAND, SHRI MANISH JAIN, ALONG WITH SHRI PRATEEK JAIN, THE LEA RNED COUNSELS FOR THE ASSESSEE INVITED MY ATTENTION TO THE FACTUAL FINDING RECORDED BY THE LEARNED CIT(A) BY CONTENDING THAT THE ADDITION WAS RIGHTLY DELETED BY THE LEARNED FIRST APPELLATE AUTHORITY. 3. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL AVAILABLE ON RECORD. THE FACTS IN BRIEF ARE THAT THE ASSESSEE AN INDIVIDUAL ENGAGED IN THE BUSINESS OF BUILDER AND DEVELOPER DECLARED LOSS OF RS. 1,29,68,736 IN HIS RETURN ON 15.09.2009. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ON 30. 11.2011 ASSESSING THE LOSS AT RS. 1,13,73,448. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(A) WHEREIN VIDE ORDER DATED 03.02.2014, PART RELIEF SHRI SUMIT J. JAIN ITA NO.145/MUM/2017 3 WAS GRANTED TO THE ASSESSEE. LATER ON, THE CASE OF THE ASSESSEE WAS RE - OPENED U/S 147 ON THE BASIS OF INFORMATION THAT THE ASSESSEE HAS RECEIVED ACCOMMODATION ENTRY OF UNSECURED LOAN FROM M/S. LAXMI TRADING COMPANY, M/S. MOULI GEMS, M/S. MINAL GEMS, M/S. NAMAN EXPORTS AND M/S. PRIME STAR , PERTAINING TO BHAWARLAL JAIN GROUP. AS PER THE ASSESSEE, D URING THE ASSESSMENT PROCEEDINGS, DOCUMENTARY EVIDENCES PERTAINING TO LOAN FROM AFOREMENTIONED PARTIES LIKE CONFIRMATION, BANK STATEMENT AND ACKNOWLEDGMENT OF RETURN OF INCOME OF LOAN, BANK STATEMENT OF THE ASSESSEE REFLECTING THE AMOUNTS AND GENUINENESS O F TRANSACTIONS WERE FILED. HOWEVER, THE LEARNED ASSESSING OFFICER TREATED THE LOAN AS UNEXPLAINED CASH CREDIT ON THE PLEA THAT THE ASSESSEE COULD NOT PRODUCE THE PARTIES . THEREAFTER, THE LEARNED ASSESSING OFFICER COMPUTED THE PEAK OF UNSECURE LOAN AMOUNTIN G TO RS. 1,91,00,000 AND MADE ADDITION OF RS. 40,00,000 U/S 68 OF THE ACT. ON APPEAL, BEFORE THE LEARNED CIT(A), THE ADDITION SO MADE WAS DIRECTED TO BE DELETED. THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. SHRI SUMIT J. JAIN ITA NO.145/MUM/2017 4 4. IF THE OBSERVATIONS MADE IN THE ASSESSMENT ORDER LEADING TO THE ADDITION AND THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER, IF KEPT IN JUXTAPOSITION, AND ANALYSED THERE IS A FACTUAL FINDING IN PARA - 5.3 THAT THE ASSESSEE DISCHARGED THE PRIMARY ONUS AS THE LENDER HAD RESPONDED TO NOTICES ISSUED U/S 133(6) OF THE ACT CONFIRMING THE TRANSACTION. THE LEARNED ASSESSING OFFICER DID NOT CONTROVERT THE CLAIM OF THE ASSESSEE. THE LOANS WERE TAKEN THROUGH BANKING CHANNEL AND THE RECEIPT OF TAKING THE LOAN HAS BEEN DULY EXAMINED IN PARA - 5.3 (PAGE - 13) OF THE I MPUGNED ORDER. THE LOANS WERE DULY REFLECTED IN THE LOANS AND ADVANCES COLUMN IN THE BALANCE SHEET AND THERE IS FURTHER FACTUAL RECORDING THAT THERE WAS NEITHER ANY CASH DEPOSIT NOR ANY WITHDRAWAL IN ANY BANK ACCOUNT CASTIGATING THE SAME AS ACCOMMODATION E NTRIES. IT IS FURTHER NOTED THAT THE ASSESSEE DULY PAID THE INTEREST ON THE LO AN AMOUNT AND DEDUCTED. COPY OF FORM NO.16A WAS ALSO FILED AND THE LEARNED ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY EVIDENCE / REASON TO DISBELIEVE THE EVIDENCE FILED BY T HE ASSESSEE. I AM SATISFIED WITH THE REASONING OF THE SHRI SUMIT J. JAIN ITA NO.145/MUM/2017 5 LEARNED CIT(A) THAT THE ADDITION WAS MERELY MADE ON THE BASIS OF PRESUMPTION THAT ALL THE FIVE CONCERNS FROM WHOM LOAN WAS TAKEN WERE MANAGED AND CONTROLLED B Y SHRI BHAWARLAL JAIN. THE STATEMENT WAS ALS O RECORDED WHEREIN THERE IS NO MENTION THAT ANY ACCOMMODATION ENTRY WAS OBTAINED. RATHER, THE CASE OF THE ASSESSEE IS FORTIFIED BY THE REPLY TO QUESTION NO.40 AND 41 WHEREIN IT HAS BEEN TENDERED THAT THE LOAN WAS ADVANCED AND INTEREST @ 9% P.A. WAS CHARGED . THE NAME OF THE ASSESSEE IS NOWHERE MENTIONED IN THE LIST OF SUSPICIOUS DEALER / PERSON. THUS, I FIND NO INFIRMITY IN THE CONCLUSION OF THE LEARNED CIT(A), RESULTING INTO DISMISSAL OF THE IMPUGNED GROUND RAISED BY THE REVENUE. 5. THE NEXT GROUND PERTAINE D TO DELETION OF ADDITION OF RS. 5,78,278, MADE ON ACCOUNT OF INTEREST EXPENDITURE ON ALLEGED BOGUS LOANS . THE LEARNED D.R. DEFENDED THE ADDITION, WHEREAS, THE LEARNED COUNSEL FOR THE ASSESSEE INVITED MY ATTENTION TO THE FINDING RECORDED IN PARA - 6.1 OF THE IMPUGNED ORDER. ON A PERUSAL OF RECORD AND THE ASSERTIONS MADE BY THE RESPECTIVE COUNSELS. THERE IS A FINDING IN THE IMPUGNED ORDER THAT SHRI SUMIT J. JAIN ITA NO.145/MUM/2017 6 THE ASSESSEE DULY PRODUCED THE BANK STATEMENT FROM WHERE INTERESTS WERE PAID ALSO COPIES OF FORM NO.16A EVIDENCING THE TDS MADE AND DEPOSITED INTO THE GOVERNMENT ACCOUNT WITH RESPECT TO PAYMENT OF INTEREST. SINCE IN EARLIER PARAS OF THIS ORDER SINCE I HAVE UPHELD THE ORDER OF THE LEARNED CIT(A), THEREFORE, THE ISSUE OF INTEREST IS CONSEQUENTIAL IN NATURE, THEREFORE, THE C ONCLUSION DRAWN IN THE IMPUGNED ORDER IS UPHELD. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. T HIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LEARNED REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 13 TH FEBRUARY , 201 8. SD/ - (JOGINDER SINGH) / JUDICIAL MEMBER MUMBAI; DATED : 12/ 03 /2018 PRADEEP J. CHOWDHURY , SR. PS SHRI SUMIT J. JAIN ITA NO.145/MUM/2017 7 / COPY OF THE ORDER FORWARDED TO : 1. / THE ASSE SSEE 2. / THE REVENUE 3. , ( ) / THE CIT, MUMBAI. 4. / CIT(A) - , MUMBAI 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / B Y ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI