DY CIT CENTRAL CIRCLE-4(1), MUMBAI V. M/S VINODKUMAR BAJAJ & COMPANY HUF, MUMBAI

ITA 1873/MUM/2020

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 9708 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-01-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 25-10-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Peak credit; Accommodation entries; TDS
• Section: 131; 68; 148; 143(3); 133A; 133(6); 195; 251; 143(2); 13

Judgement Text

ITA Nos. 1873 &1875/Mum/2020 A.Ys. 2009-10 Dy. CIT,CC-4(1) Vs. M/s Vinodkumar Bajaj & Company, M/s Ramniwas Bajaj & Company 1 IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORESHRI AMARJIT SINGH, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER IT A No. 1 873/ Mu m/ 2020 ( A. Y 2009-10) D y. Commissi oner of Income T ax, Ce nt ral Circle- 4( 1), R oom N o. 1918, 19 t h Floo r, Air Indi a B uilding, Nariman Po int, Mu mbai – 400 021 Vs . M/ s Vino dkumar Bajaj & Company HUF , 108, 1 s t Flo or, 24- B Raja Ba hadur C ompound, Hamam St reet , Fort, Mumbai – 400 023 लेख सं./ज आइआर सं./ P AN /GIR N o. : A AA HV 3639Q Respondent .. Appellant IT A No. 1875/ Mum/ 20 20 ( A. Y 2009-10) D y. Commissi oner of Income T ax, Ce nt ral Circle- 4( 1), R oom N o. 1918, 19 t h Floo r, Air Indi a B uilding, Nariman Po int, Mu mbai – 400 021 Vs . M/ s Ramniwas B ajaj & Company HUF , 108, 1 s t Flo or, 24- B Raja Ba hadur C ompound, Hamam St reet , Fort, Mumbai – 400 023 लेख सं./ज आइआर सं./ P AN /GIR N o. : A AA HR 6693G Respondent .. Appellant Appellant by : Ms. Hema Sharma Respondent by : Shri S.N. Kabra Date of Hear in g 11.01.2022 Date of Pr onouncement 27.01.2022 ITA Nos. 1873 &1875/Mum/2020 A.Ys. 2009-10 Dy. CIT,CC-4(1) Vs. M/s Vinodkumar Bajaj & Company, M/s Ramniwas Bajaj & Company 2 आदेश / O R D E R PER AMARJIT SINGH, AM: Since both the appeals of the revenue are based on similar facts and identical issue directed against the order of the Ld. CIT(A)-52, Mumbai, therefore for the sake of convenience both the appeals are adjudicated together by taking ITA No. 1873 as lead case and its finding will be applicable to the ITA No. 1875. ITA No. 1873/Mum/2020 A.Y. 2009-10: “1. On the facts and circumstances of the case and in law the Ld. CIT(A) has erred in deleting the addition of Rs.3,05,05,000/- u/s 68 of the I.T Act, 1961 without appreciating the decision of the Hon'ble Apex Court in the case of P R Metrani v. CIT (287 ITR 209) and considering the statement recorded u/s 132(4) of the IT Act of the promoter of lender entity. 2. On the facts and circumstances of the case and in law, the Id CIT(A) has erred in deleting the addition u/s 68 of the IT Act without considering the decision of Hon'ble Apex Court in the case of CIT vs. Durga Prasasd 82 ITR 540 even when the collection of evidences during the search proceedings at the lender's premises and survey proceedings at assessee's premises indicated such unexplained crites in the books of the assessee.” 2. The fact in brief is that return of income declaring total income at Rs.11,50,040/- was filed on 30.09.2009. The assessment under Sec. 143(3) was finalized on 24.10.2011 determining total income at Rs.11,50,040/-. Subsequently, the case of the assessee was reopened by issuing of notice u/s 148 of the Act on 16.12.2015. The reason for reopening the assessment was based on the information from a search action conducted by the investigation wing of the department in the case of Shri Bhanwarlal Jain and Rajesh Bhanwarlal Jain (son of Bhanwarlal Jain) on 03.10.2013 establishing that concerns operated by Shri Bhanwarlal Jain involved in providing accommodation entries of various nature like unsecured loan/bogus shares etc. Shri Bhanwarlal Jain has admitted that he along with his son used to control 70 such concerns through them they were providing accommodation entries of purchase and loan ITA Nos. 1873 &1875/Mum/2020 A.Ys. 2009-10 Dy. CIT,CC-4(1) Vs. M/s Vinodkumar Bajaj & Company, M/s Ramniwas Bajaj & Company 3 to various beneficiaries. These entities were not having any trade activity of their own but fictitious sales and purchases entries were booked to provide such entries to clients. The assessing officer has stated that a 4GB sony pen drive was found and seized during search action at office/residential premises of Bhanwarlal Jain & Rajesh Bhanwarlal Jain on 03.10.2013 containing recording of cash transactions which were not routed through bank. The bogus concern managed and controlled by Bhanwarlal Jain import diamonds which were handled over to parties out of books. Against this stock standing in the books of benami concern, bogus sales bills were issued to parties. These parties who take accommodation entries from bogus concern make payment through cheques/RTGS and take the cash back. The A.O has also stated that such benami concern have received cash from various entities like Vinod Kumar Bajaj & Company, Ramniwas Bajaj & company etc. It was revealed that the assessee had taken accommodation entries from M/s Ankita Exports, M/s Laxmi Diamonds, M/s Mohit Enterprise, M/s Navkar Diamond, M/s Pankaj Exports, M/s Parvati Exports, Pushpak Gems & Rajan Diamond totaling to Rs.3.69 crores in A.Y. 2009-10. Similar loans had been taken by the assessee from various concerns controlled by the Jain Group in other years also. The A.O has also stated that as per market information Bajaj Group was engaged in tax evasion by accepting cash towards commission on account of loan syndication arranged by them for various individual/concern. It is also stated that the cash so generated is brought back into the business by way of loans and advances from doubtful entities engaged in providing accommodation entries. The cash was handed over to these concern through hawala in return, loan through account payee cheque were accepted by group concern. In the light of the above information a survey action 133A was also conducted in the case of assessee on 16.10.2014. Therefore, assessing officer has reopened the assessment of M/s Vinod Kumar Bajaj & Company HUF and M/s Ramniwas Bajaj & Company HUF for various assessment years starting from assessment year 2008-09 to A.Y. 2012-13 ITA Nos. 1873 &1875/Mum/2020 A.Ys. 2009-10 Dy. CIT,CC-4(1) Vs. M/s Vinodkumar Bajaj & Company, M/s Ramniwas Bajaj & Company 4 wherein the assessee had transactions with the concerns to be controlled by Bhanwerlal Jain Group. In response to the notice issued u/s 148 the assessee has filed return of income dated 29.12.2015 declaring total income at Rs.1150038/- as declared in the original return of income. Notice u/s 143(2) was issued on 27 th July, 2015. 3. During the course of the assessment the A.O noticed that assessee had accepted loans from various parties and made payment on such loan through banking channel. Since loans had allegedly been taken from Bhanwerlal Group cases therefore, the A.O has issued show cause notice to the assessee stating that these entities had no business activities except to provide accommodation entries in the nature of unsecured loan. The A.O stated that no compliance was made by these concern in response to the summon issued u/s 131 of the Act. The A.O has also asked the assessee to produce these parties for examination. The assessee was also asked to show cause by these loan entries should not be added to the income of the assessee u/s 68 of the Act. The detail of these parties as provided in the assessment order is reproduced as under: Sr. No. Name of the party from which loan taken Amount (INR) 1. Ankita Exports 60,00,000 2. Laxmi Diamonds 20,00,000 3. Mohit Enterprises 50,00,000 4. Navkar Diamond 70,00,000 5. Pankaj Exports 20,00,000 6. Parvati Exports 23,75,000 7. Pushpak Gems 25,00,000 8. Rajan Diamond 1,00,00,000 Total 3,68,75,000 The assessee has submitted that the unsecured loan taken by them from the aforesaid parties were genuine and had not agreed with the claim of the assessing officer that these entities were only engaged in providing ITA Nos. 1873 &1875/Mum/2020 A.Ys. 2009-10 Dy. CIT,CC-4(1) Vs. M/s Vinodkumar Bajaj & Company, M/s Ramniwas Bajaj & Company 5 accommodation entries. The assessee has also submitted that Shri Bhanwerlal Jain has retracted his statement and thereafter no statement of concern persons from the entities had been recorded. The assessee also submitted that on the basis of information gathered during the search action of Bhanwerlal Jain group, the premises of the assessee group was surveyed but no incriminating material had been found. The assessee has also submitted that various loan transaction stated by the assessing officer to be associated with Bhanwerlal Jain group were reflected in the books of account and the audit report in form No. 3CD filed u/s 44AB wherein all the details pertaining to loan including PAN, address and the detail of transaction were mentioned. During the course of assessment the assessee has also filed various detail like account confirmation filed by the parties, copy of ledger account of the assessee in the books of these parties, their PAN number, acknowledgment of the return, balance sheet, profit and loss account and schedule of the balance sheet as well as the affidavit of concern parties/ proprietors of the lender entities. The assessee claimed before the A.O that it had established the identify and creditworthiness of the creditors as well as genuineness of the transactions and no addition u/s 68 could be made. On an alternative basis the assessee has submitted that if at all addition was required to be made, it should be the peak credit as computed at Rs.55,70,000/- for the year under consideration. The A.O has not agreed with the submission of the assessee. The AO rejected the claim that the assessee had established the identity and creditworthiness of the parties. The A.O has reproduced the statement of Shri Vinodkumar Bajaj Karta of Vinodkumar Bajaj & Company, HUF recorded during the course of survey on 16.10.2014 at Page No. 13 to 19 of A.O. The assessing officer has drawn the following inferences from the statement of Mr. Bajaj recorded during the course of survey as under: “1. The assessee had taken affidavits from entities of Bhanwarial Jain and no affidavit was taken from other parties who had provided loan to M/s Vinodkumar Bajaj & Co. HUF. ITA Nos. 1873 &1875/Mum/2020 A.Ys. 2009-10 Dy. CIT,CC-4(1) Vs. M/s Vinodkumar Bajaj & Company, M/s Ramniwas Bajaj & Company 6 2. The affidavits were received in April 2014 i.e. after 6 months from the date of search of Bhanwarlal Jain. It means, it is an afterthought to prove accommodation entries as genuine loans. 3. All the affidavits were signed on either 25th April 2014 or 28th April 2015 which cannot be a coincidence for all the parties who had provided accommodation entries to the assessee. 4. All the loans were arranged by Shri Bhanwarlal Jain only. 5. The assessee failed to prove the identity of these creditors i.e. he does not know the names of the directors, partners, proprietors or authorized representatives or even the nature of business of these entities. 6. No collateral security was given by assessee while obtaining these loans. 7. The rate of interest on all loans from entities of Bhanwarlal Jain are 6% to 10% while on the same time, the secured loans were charged at a higher rate of interest (14 to 16%). 8. There was no loan agreement from any of the entities of Bhanwarlal Jain. 9. Assessee had failed to explain as why Bhanwarlal Jain had not charged any Commission on the arrangement of loans from entities controlled by him. 10. Even the assessee i.e. Shri Vinodkumar Bajaj failed to prove the identity of entities who provided loans recently i.e. in FY 2013-14. 11. In support of identity and genuineness of the entities, the assessee Shri Vinodkumar Bajaj shown the affidavits given by loan creditors. 12. The assessee has no idea about the creditworthiness of those loan giving entities.” The A.O has not accepted the submission made by the assessee and stated that it is established that assessee has entered into loan transaction with bogus entities floated and managed by Shri Bhanwerlal Jain. However, after verification of those transactions the A.O observed that repayment of loans were made through banking channel, therefore, held that the peak amount arising out of its multiple transactions of acceptance and payment of loan was treated as unexplained cash credit u/s 68 in the hands of the assessee. However, the peak credit determined by the assessee was not accepted on ground of consequential ITA Nos. 1873 &1875/Mum/2020 A.Ys. 2009-10 Dy. CIT,CC-4(1) Vs. M/s Vinodkumar Bajaj & Company, M/s Ramniwas Bajaj & Company 7 effect of A.Y. 2008-09 as referred at para 6 of the assessment order, therefore, peak credit at Rs.3,05,05,000/- was added to the total income treating the same as unexplained cash credit u/s 68 of the Act. 4. Aggrieved with the assessment order the revenue carried the matter in appeal before the CIT(A). The ld. CIT(A) has deleted the addition made by the assessing officer based on peak credit with respect to the loans taken during the year on the basis of similar issue decided by the ld. CIT(A) in assessment year 2008-09. The relevant part of the decision of CIT(A) pertaining to the same issue for assessment year 2008-09 is reproduced as under: “6.7 With respect to ground no. 4 and 5 which relate to the merits of the additions under section 68 of the Income Tax Act, the submissions made on merits of the case have been examined.lt has also been noted earlier that in the case of Vashu Bhagnani (supra) where the loans had been taken and returned much prior to the search action in the case of Bhanwarlal Jain group; the ITAT held that when the transaction had been squared off much prior to "search action, no addition was called for. It is also noted that the modus operand! of the lenders was such that they could have surplus funds for short term lending. Hence, all the lending transactions appearing in their accounts could not be taken to be bogus prima facie and had to be examined based on other evidences. In this regard, the details of documents filed by the assessee before the Investigation Unit, survey party and the assessing officer have been elaborated earlier. The assessee has filed various documents including the bank account extracts of the lender entities. It is noted that the issue under discussion does not relate to an isolated loan transaction between the two parties and these two parties have no other transaction whatsoever with reference to this transaction meaning thereby that the transaction in the bank has been compensated in some other way by the other party. The loan transactions have been accompanied by their return subsequently and also payment of interest on these amounts. The only observation by the AO is that the rate of interest charged by the lender is lower than market rate and the loan given is without collateral. It is also noted that the transactions are not isolated transactions between the two parties wherein an attempt has been made to square off the transactions after search. These transactions are found to have been conducted routinely over a period of seven to eight years and are based on sufficient balances in these bank accounts. Undisputedly, such transactions do not include merely lending but they also include receipt of interest and return of capital. The discussion at para 6.5 above is relevant to decide the issue. There is no evidence that the accounts have been used merely as a conduit. With respect to confirmation of transactions, it is also noted that some of the partners/proprietors had attended the AO's office while others could not because of some reason. On this issue, the reliance placed by the assessee on the decision in the case of Nemichand Jain vs DC IT, Central Circle 1(3), Mumbai in ITA No. 2641/Mum/2018 is found relevant. It is noted that in this case also, the loans had been taken from the Jain Group wherein evidence was gathered that the group entities were engaged in providing accommodation entries, a survey had been conducted in the premises of the assessee ITA Nos. 1873 &1875/Mum/2020 A.Ys. 2009-10 Dy. CIT,CC-4(1) Vs. M/s Vinodkumar Bajaj & Company, M/s Ramniwas Bajaj & Company 8 u/s. 133A and subsequently the case of the assessee had been reopened for reassessment. The facts of this case are detailed at para 5 of the order/The ITAT has described the facts of that case at para 5 of the order which is reproduced below: “5. We have heard the counsels of both parties and also perused the material placed on record as well as judgements cited by the receptive parties as well as the orders passed by the Revenue Authorities. The issue that came up for our , consideration is the addition on account of unsecured loan of-Rs: 75,00,000/- taken from companies controlled and operated by Shri Bhanwarlal Jain and his associates. The Ld. AR for the assessee submitted that Ld. CIT(A) was erred in confirming additions made by the AO towards unsecured loan taken from companies belonging to Bhanwarlal Jain without appreciating the fact that the assessee has proved all ingredients provided under section 68 of the Act The Ld. AR further submitted that the assessee has filed enormous documents in order to prove the identity, creditworthiness of the parties and genuineness of transaction. In fact, the AO never disputed identity of loan creditors. The AO has categorically admitted that assessee has fifed various documents including confirmation letter, PAN, ITR acknowledgement along with financial statement, bank statement of loan creditors and also affidavit from director/partner/proprietor of those companies/firms to prove the identity, genuineness of transactions and creditworthiness of the parties. The Ld. AR further submitted that the assessee also filed various details in order to prove genuineness of transactions in the backdrop of admission of Shri Bhanwarlal Jain in his statement recorded under Section 132(4) of the Act and submitted that Shri Bhanwarlal Jain has filed an affidavit before the income tax authorities along with a letter retracting his statement given under section 132(4) of the Act, Therefore ,when the person who gave the statement with an affidavit, then the statement recorded during the course of search does not have any evidentiary value. Therefore, the same cannot be considered as sacrosanct to come to the conclusion that the transactions were bogus in nature. The Ld. AR further submitted that the sole basis for the AO to make additions towards unsecured loans is a statement of Shri Bhanwarlal Jain, which was subsequently retracted by him. Further, in spite of specific request, the AO declined to provide the statements or evidence relied upon and a/so declined to give opportunity to cross examine the parties. The Ld. AR further submitted that during the course of survey in the group cases of assessee, no incriminating material was found to link credits found in the books of account of the assessee and also to evidences collected from Shri Bhanwarlal Jain group cases during the search. The AO as well as the Ld. CIT(A) has given much importance to the modus operandi and evidence collected during the search in the case of Shri Bhanwarlal Jain ignoring the evidences filed by the assessed during the assessment proceedings. Therefore, when the assessee discharged initial burden by filing enormous documents to prove the identity, genuineness of transactions, creditworthiness of the parties, additions could not be made under section 68 of the Act, only on the basis of evidences collected from third party's information. In this regard, he relied upon various judicial precedents. The case was relied upon by the assessee are reproduced hereunder:- 1. CIT vs. Goa Sponge and Power Ltd (13/02/2012) Tax Appeal No. 16 of 2012 (High Court-Bombay) ITA Nos. 1873 &1875/Mum/2020 A.Ys. 2009-10 Dy. CIT,CC-4(1) Vs. M/s Vinodkumar Bajaj & Company, M/s Ramniwas Bajaj & Company 9 2. CIT vs. Creative World tele films Ltd.(2011) 333 ITR 100 (Bom- High Court) 3. CIT vs. Lovely Exports Pvt. Ltd (2008) 216 CTR 195 (SC) 4. CIT vs. Stellar Investment Ltd (2001) 251 ITR 263(SC) (Civil Appeal) 5. CIT vs. Nav Bharat Duolex Ltd (20l3) 35 Taxmann.com 289 (AII- High 6. CIT vs. JayDee Securities & Finance Ltd, (2013), 32 Taxmann.com 91 (All High Court) 7. ACIT vs. Venkateshwarlspat Pvt. Ltd (2009) 319 ITR 393 (Chhatisgarh-High Court) 8. Mod Creations Pvt. Ltd vs. ITO (2013) 354 ITR 282 (Delhi High Court) 9. CIT vs. Al AnamAgro foods (P.) Ltd (2013) 38 Taxmann.com 375 (High Court) 10. CIT vs. Dwarkadish Investment (P) Ltd (2011) 330 ITR 298 (Del- High Court) 11. CIT vs. Namastey Chemicals Pvt. Ltd (2013) 33 Taxmann.com 271 (Guj-High Court) 12. CIT vs. Peoples General Hospital Ltd. (2013) 356 ITR 65 (WIP- High Court) 13. CIT vs. Shree Rama Multi Tech Ltd. (2013) 34 Taxmann.com 177 (Guj-HC) 14. CIT vs. Nikunj Eximp Enterprises (P.) Ltd (2013) 35 Taxmann.com 384 (Bom) 15. CIT vs. Samir Bio-Tech Pvt. Ltd (2010) 325 ITR 294 (Del-High Court) 6. The Ld. DR on the other hand strongly supported the order of the Ld. CIT(A) and submitted that the AO as well as the Ld. CIT(A) brought out clear facts to the effect that the assessee is one of the beneficiaries of accommodation entries provided by Bhanwarlal Jain group companies. The assessee neither controverted findings of the AO as well as the Ld. CIT(A) nor filed any valid evidence to prove that unsecured loans taken from the above companies are genuineness transactions. Mere furnishing certain paper documents including bank statements would not sufficient enough to come out of shadow of provisions of section 68 of the Act, when the evidences collected during the search as well as survey clearly shows that transactions between the parties are not genuine transactions, therefore, there is no error in the findings recorded by the lower authorities. Accordingly, additions made by the AO should be upheld. 6.8 It is noted that the facts in this case are similar to the facts of the above case. The ITAT has elaborated on various aspects and has decided the issue as below: “8. The provisions of section 68 of the Act deals with the cases, where any sum found credited In the books of account of the assessee in any Financial Year, and the assessee offers no explanation about the nature and source thereof or explanation offered by the assessee is not in the opinion of the AO satisfactory, ITA Nos. 1873 &1875/Mum/2020 A.Ys. 2009-10 Dy. CIT,CC-4(1) Vs. M/s Vinodkumar Bajaj & Company, M/s Ramniwas Bajaj & Company 10 then the sum so credited may be charged to income tax as the, income of the assessee of that previous year. A plain reacting of section 68 makes it very clear that in order to fix any credit within the ambit of section 68 of the Act, the AO needs to examine three ingredients i.e. identity, genuineness of transaction and creditworthiness of the parties. If the assessee proves all ingredients provided under section 68 of the Act, then the onus shifts" to the AO to prove otherwise. In this legal background, if you examine the identity of the assessee, in light of findings recorded by the AO in his assessment order, one has to examine, whether the assessee has discharged burden cast upon it u/s 68 of the Act in respect of unsecured loan received from certain companies controlled and managed by Shri Bhanwarlal Jain. The AO never disputed the fact that the assessee furnished various evidences to prove identity of the loan creditors. The AO has categorically admitted that the assessee has filed various details including PAN card, ITR acknowledgement, financial statement, bank statements, confirmation letters and affidavit from the parties from whom loan has been taken. The AO has disputed the genuineness of transactions and creditworthiness of the parties. The sole basis for the AO to doubt the genuineness of transactions is search conducted in the cases of Bhanwarlal Jain by the DGIT(Inv.), Mumbai Unit, where certain incriminating material found and seized as per which Bhanwarlal Jain and his associates were involved in providing accommodation entries and the assessee is one of the beneficiaries of such accommodation entries. The A O has taken note of statement recorded by the department from Shri Bhanwarlal Jain and his associates. The AO has taken note of the survey proceedings conducted in the group cases of assessee and statement recorded from directors and employees of the assessee group cases. Except this, no contrary evidences has been brought on record by the AO to disprove the claim of the assessee that these are genuine transactions and unsecured loan taken under normal business circumstances. Therefore, under these factual matrix, we have to examine whether the credits found in the books of accounts of the assessee are hit by the provisions of section 68 of the Act or not. The sole basis for the AO to make additions is statement of Shri Bhanwarlal Jain recorded under Section 132(4) of the Act, where he admitted that he is involved in providing bogus unsecured loans entries to various beneficiaries. The statement given by Shri Bhanwarlal Jain has been retracted by himself by filings affidavits before the income tax authorities. Therefore, there is no reason for the AO to go only on the basis of statement of Shri Bhanwarlal Jain so as to treat unsecured loan taken by the assessee from the firm and companies controlled and managed by Shri Bhanwarlal Jain and his associates. 9. Having said so, let us examine what is the basis for the AO to arrive at conclusion that the transactions between the parties are not genuine and which are hit by the provisions of section 68 of the Act. The AO never brought out any further facts to link credits found in the books of accounts of the assessee to the evidences found during the course of sea.rch in the. case of Shri Bhanwarlal Jain except statement of Shri Bhanwarlal Jain. Even during the course of survey in group cases of assessee, no incriminating material was found which can be linked to evidences collected during the course of search in case of Shri Bhanwarlal Jain. Further, during the course of survey in assessee's group cases, the directors and employees have categorically admitted that they have personally visited office of Shri Bhanwarlal Jain Group companies for arranging Loans. The AO did not controvert this fact by bringing any other evidences. On ITA Nos. 1873 &1875/Mum/2020 A.Ys. 2009-10 Dy. CIT,CC-4(1) Vs. M/s Vinodkumar Bajaj & Company, M/s Ramniwas Bajaj & Company 11 the other hand; the assessee has filed complete details including, confirmations from Loan creditors, their PAN details master data, affidavit from the directors/partners/proprietors of those companies, income tax acknowledgements receipts, along .with financial statements, bank statements of loan creditors in order to prove, the identity, genuineness of transactions and creditworthiness of the parties. We, further, noted that all these loans have been taken through proper banking channels. The assessee has paid interest after deducting applicable TDS as per the law. These Loans have been repaid during subsequent financial year. All these documents are part of assessment proceedings. The AO has never disputed these factual aspects. Therefore, once the assessee has discharged its initial burden by filing necessary evidences in order to prove identity, genuineness of transactions and creditworthiness of the parties, then there is no reason for AO to suspect the transactions between the parties only on the ground that the person who have secured loan had admitted in his statement u/s 132(4) of the Act that these transactions are accommodation entries, more particularly when the person who gave the statement retracted his statement by filing affidavit. Further, the AO failed to carry out further enquiries in light of evidences gathered during the course of search and survey to establish the fact that in fact these transactions are non-genuine, but merely relied upon the statement of Shri Bhanwarlal Jain to make additions u/s 68 of the Act. No doubt, the AO is having every right to suspect the transactions but, that they itself would not give rise an occasion for the AO to male additions under section 68 of the Act, when the evidences filed by the assessee clearly proves the fact these transactions were genuine transactions which are undertaken under normal commercial business circumstances. Therefore, we are of the considered view that the AO erred in making additions towards unsecured loan taken from companies controlled and managed by Shri Bhanwarlal Jain under section 68 of the Act. 6.9 After discussing the case laws cited by the assessee at para no. 10 to 13, the ITAT has observed that: 14. We have considered the following judgements relied upon by the learned D.R.:- 1. Principal Commission of Income Tax vs. NRA Iron & Steel (P) Ltd (2019) 103 taxmann.com 48(SC) 2. Principal Commission of Income Tax vs. NDR Promoters (P) Ltd (2019) 102 taxmann.com 282(Del) 3. Pee Aar Securities Ltd. vs DCIT (2018) 96 taxmann.com 602(Delhi-Trib) 4. Pavankumar M. Sanghvi vs. Income Tax Officer (2018) 97 taxmann.com 398 (SC) After considering the case law relied upon by the learned D.R. i.e the case of NRA Iron & Steel (P.) Ltd. we note certain distinguishing features vis-a-vis factual matrix of the present case. Upon perusal of paras 3.7 & 3.8 of the said judgement, it is noted that the Ld. A.O had issued summons to many as 19 ITA Nos. 1873 &1875/Mum/2020 A.Ys. 2009-10 Dy. CIT,CC-4(1) Vs. M/s Vinodkumar Bajaj & Company, M/s Ramniwas Bajaj & Company 12 investor entities but nobody appeared on behalf of the investor, companies^ Submissions were received through DAK only which created a doubt about the identity of the investor company. Further the AO independently got field inquiries conducted at the location of investor companies, the result of which has been tabulated in the said para. Notice was served on few entities but the same were not replied to. In few cases, the notices were returned back submissions were received in few cases through DAK wherein the company only provided the mode of investment but no reasons were supplied for paying a huge premium of 190/- per share. Another striking feature was that most of the investors had reflected meagre income during assessment year under dispute. The two companies in Mumbai as well as Guwahati were found to be non-existent. With respect to Kolkata companies, the response came through DAK only and nobody appeared. Further, the bank statements were not produced in most of the cases to establish the source of funds for making huge investments. However, the factual matrix, before us, in the present case is quite different. In the present case, we find that the assessee has duly discharged the initial onus of proving the identity of the investors, creditworthiness of the transactions and genuineness of the transactions. Notice issued u/s 133(6) have been responded to. In such a scenario, the onus to dislodge the assessee's claim, in our opinion, was shifted back to Ld. AO and he was duty bound to investigate the case further. However, the facts on record nowhere establishes that such further inquiries/ investigations have subsequently been conducted by Ld. AO in the present case. For the said proposition, we draw strength from the land mark case of Kale Khan Mohammad Hanif vs. CIT [50 ITR 1] and Roshan Di Hatti vs.CIT [107 ITR 938] as already cited in the above decision of Hon'ble Apex Court. Similar is the ratio of Hon'ble Apex Court rendered in CIT vs. Orissa Corporation [159 ITR 178]. It is trite law that additions could not be made merely on the basis of doubts, conjectures or surmises. After considering the entire case law as discussed above we find that the case law considered by the Revenue authorities were rendered under different set of facts which cannot be applied to the facts of the present case. Accordingly the case law relied upon by the learned D.R. are rejected. 15. In this view of the matter and considering the ratio of case laws discussed hereinabove, we are of the considered view that the assessee has discharged initial burden by filing various documents- to prove identity, genuineness of transactions and creditworthiness of the parties. Therefore, we are of the considered view that the AO was erred in making additions towards unsecured loan under section 68 of the Act. The Ld. CIT(A) without appreciating the facts simply confirmed the addition made by the AO. Hence, we reverse the findings of the CIT(A) and direct the AO to delete the additions made-towards unsecured loans under Section 68 of the Act. 6.10 The findings of the ITAT outlined above are squarely applicable to the facts of this case. It is noted that there is no allegation by the AO that the loan entries are coupled with similar contra transactions in cash, the pen drive seized from the premises of Bhanwarlal Jain. The conduct of the two parties also does not lead us to an inference that each loan entry was coupled with a contra cash transaction. During the survey, the assessee has not accepted that the loans are bogus and no such evidences have been located. The transactions have happened on a regular basis over more than 8 to 9 financial years comprising of acceptance and return of loans along with interest rather that one isolated bogus transaction (wherein no return of capital or payment of interest is ITA Nos. 1873 &1875/Mum/2020 A.Ys. 2009-10 Dy. CIT,CC-4(1) Vs. M/s Vinodkumar Bajaj & Company, M/s Ramniwas Bajaj & Company 13 contemplated, as has been the case in many other Bhanwarlal Jain entries). The transactions include transactions of receipt of loans, complete or part repayment of these loans during the year and payment of interest after deduction of TDS. It is not a case where the parties do not know each other or do not know the financial status of the other party but it is clear that they have an arrangement for advancing of such loans regularly as per requirements of the party at pre-arranged interest rates.- Mostly, these loans are short term as it will be noted that the peak balance in most of the financial years is negative and hence, it has not resulted into any addition during assessment proceedings. Another argument of the AO that in the statement recorded during survey, the assessee did not know about the actual nature of business activity carried out by Bhanwarlal Jain and hence, the loans accepted would be bogus does not appear to be a sound argument. There was no reason for the assessee to keep full knowledge of the activities of the other person if the only transaction related to loans. 6.11 There is no restriction on the AO in relying on various materials/evidences gathered by the Department during the course of search action in the case of Bhanwarlal Jain Group. It has already been held that there was no need for the AO to provide a cross examination to the assessee for a transaction for which the onus was on the assessee to prove the genuineness through his own documents and evidences. Hence, it is the submissions/documents/information during the assessment proceedings which assume significance vis-a-vis the information generated during search. It is necessary for the AO to examine the case of the assessee keeping both these evidences together. In the present case, it is noted that the assessee has submitted sufficient documentation before the AO on the issue which have been discussed earlier. In light of these unique facts of this case and the discussion held above and also in light of the decision of jurisdictional ITAT in this regard, the action of the AO in making the addition under section 68 of the Act is not found tenable and is dismissed. The ground no 3 and 4 raised by the assessee are allowed. The addition made by the Assessing Officer based on peak credit with respect to the loans taken during the year are directed to be deleted. 5. During the course of the appellate proceedings the ld. D.R has contended that assessee has entered into loan transaction with bogus entities floated and managed by Shri Bhanwerlal Jain and submitted that ld. CIT(A) is not justified in deleting the addition made by the assessing officer. He has also placed reliance on the decision of Hon’ble Supreme Court in the case of CIT(A) Vs. Durga Prasad 82 ITR 540 On the other hand, the ld. A.R submitted that the A.O has made addition only on the basis of statement of Shri Bhanwerlal Jain and no copy of statement and opportunity of cross examination had been given to the assessee. The A.O has disregarded the evidences in the form of loan confirmation, PAN details income tax acknowledgment receipt, financial statement, bank statement and affidavits of the lenders filed before the assessing officer during the course of ITA Nos. 1873 &1875/Mum/2020 A.Ys. 2009-10 Dy. CIT,CC-4(1) Vs. M/s Vinodkumar Bajaj & Company, M/s Ramniwas Bajaj & Company 14 assessment proceedings. The ld. counsel has also submitted that in response to summon issued u/s 131 of the Act, to the various parties all have submitted the required document/paper and in facts some parties have personally attended the hearing under the summon issued to them. The ld. counsel has also submitted a number of paper book comprising i.e detail and copies of the document, confirmation account of loan, ledger account, bank statement, acknowledgement of return of income, balance sheet, trading in profit and loss account, affidavits from creditors, copy of order passed by the Bombay High Court in the case of Rushab Enterprises Vs. ACIT dated 15.04.2015, working of peak credit in respect of loan taken/repaid, copy of orders of various cases of ITAT. The ld. counsel has also filed the copies of ITAT orders in the case of M/s Pabal Housing P. ltd. VS. DCIT in ITA No. 2687,2688,2689/ Mum/2018 dated 03.05.2019 & Nemichand Jain Vs. DCIT in ITA No. 2641, 2480 &388/Mum/2018, Nemichand Jain Enterprises Vs. DCIT in ITA No. 2360,2501 & 3018/Mum/2018, M/s Neminchand Associates Vs. DCIT in ITA 2436,2591/Mum/2018 & M/s Nemichand Home P. ltd. Vs. DCIT in ITA No. 2661 &2718/Mum/2018 , dated 03.05.2018. 6. Heard both the sides and perused the relevant material available on record. Without retreating the fact as elaborated above, the case of the assessee was reopened u/s 148 of the Act on the basis of information gathered that assessee had taken accommodation entries in the form of unsecured loan from the concern managed and operated by Shri Bhanwarlal Jain in whose case a search action was conducted on 30.10.2013 by the investigation wing of the department. A survey action u/s 133A was also carried out on the premises of the assessee by the investigation wing on 16.10.2014 and during the course of survey no material or evidence was found to demonstrate that assessee has taken accommodation entries in the form of unsecured loan from the entities controlled by Shri Bhanwerlal Jain group. During the course of assessment the ITA Nos. 1873 &1875/Mum/2020 A.Ys. 2009-10 Dy. CIT,CC-4(1) Vs. M/s Vinodkumar Bajaj & Company, M/s Ramniwas Bajaj & Company 15 assessee has requested the assessing officer to provide the copies of the relevant documents and statement of Shri Bhanwerlal Jain and also requested to provide an opportunity of cross-examination of Shri Bhanwerlal Jain & other, however, the same were not provided to the assessee. During the course of assessment the A.O had rejected the claim of the assessee that they had established the identity and creditworthiness of the parties and stated that it has been established that assessee has entered into loan transaction with the bogus entities floated and managed by Shri Bhanwerlal Jain. The sole basis of the A.O to make addition was the statement of Shri Bhanwarlal Jain which had been retracted by him by filings affidavits before the Income Tax authorities. The assessee has claimed that identify of the creditors has been established on the basis of PAN Card, return of income, account confirmations, genuineness of the transactions have been established on the basis of account confirmations and bank statements where all the loan were taken by account payee cheques and creditworthiness of the creditors were established on the basis of balance sheet and bank statement of the parties. The A.O had not controverted these material facts with any relevant evidences. In the appeal the ld. CIT(A) has deleted the amount after following the decision of coordinate bench of ITAT in the case of Nemichand Jain Vs. DCIT,CC-1(3), Mumbai, in ITA No. 2641/Mum/2018 on similar facts as elaborated in his finding supra in the order. With the assistance of the ld. representative who have gone through the decision of coordinate bench of the ITAT in the case of Neminchand Jain Vs. DCIT as discussed in the finding of ld. CIT(A), wherein the addition on account of unsecured loan taken from companies controlled and operated by Shri Bhanwerlal Jain and his associate was made wherein also the assessee has filed various details in order to prove genuineness of transaction i.e confirmation letter, PAN, ITR acknowledgment , bank statement, affidavit etc. in the backdrop of admission of Shri Bhanwerlal Jain in his statement recorded u/s 132(4) of the Act. In the case of the assessee the facts are also similar and assessee has also filed the similar detail and copies ITA Nos. 1873 &1875/Mum/2020 A.Ys. 2009-10 Dy. CIT,CC-4(1) Vs. M/s Vinodkumar Bajaj & Company, M/s Ramniwas Bajaj & Company 16 of document as were filed in the case of Nemichand Jain. In the Nemichand Jain case as reproduced in the finding of ld. CIT(A) supra the coordinate bench of the ITAT held that the assessee had discharged initial burden by filing various documents to prove identity, genuineness of transactions and creditworthiness of the parties and held that the A.O was erred in making addition towards unsecured loans u/s 68 of the Act. The ld. D.R. has not substantiated how the decisions of Hon’ble Supreme Court referred in the grounds of appeal of the revenue i.e. cases of P.R. Metrani and Durga Prasad are applicable to the facts of the case of the assessee. We are of the view that these case laws are distinguishable on the basis of facts and specific material referred in the case of the assessee i.e confirmation letters, PAN, ITR acknowledgment bank statement, affidavit etc, as discussed supra in this order and not providing copies of relevant documents, statements and opportunities of cross examination to assessee. In the case of the assessee A.O has also failed to controvert the submission of the assessee supported with the relevant material. In the light of the facts and findings of coordinate bench in the Nemichand Jain case as supra, we find that the issue raised before the Tribunal in this year pertaining to the case of the assessee are similar to the case of Nemichand P. Jain. It would not be appropriate for us to deviate from the view taken in earlier years without pointing out any material change in the facts and circumstances of the case of the assessee. Therefore, after taking into consideration the facts and findings of the Ld. CIT(A) and the relevant supporting material as discussed above, we don’t find any infirmity in the decision of ld. CIT(A). Accordingly, we do not find any merit in the grounds of appeal of the assessee. Therefore, both the grounds of appeal of the Revenue stand dismissed. ITA No. 1875/Mum/2020 A.Y. 2009-10: ITA Nos. 1873 &1875/Mum/2020 A.Ys. 2009-10 Dy. CIT,CC-4(1) Vs. M/s Vinodkumar Bajaj & Company, M/s Ramniwas Bajaj & Company 17 “1. On the facts and circumstances of the case and in law the Ld. CIT(A) has erred in deleting the addition of Rs.1,10,00,000/- u/s 68 of the I.T. Act, 1961 without appreciating the decision of the Hon'ble Apex Court in the case of P R Metrani v. CIT (287 ITR 209) and considering the statement recorded u/s 132(4) of the IT Act of the promoter of lender entity. 2. On the facts and circumstances of the case and in law, the Id CIT(A) has erred in deleting the addition u/s 68 of the IT Act without considering the decision of Hon'ble Apex Court in the case of CIT vs Durga Prasasd 82 ITR 540 even when the collection of evidences during the search proceedings at the lender's premises and survey proceedings at assessee's premises indicated such unexplained crites in the books of the assessee." 7. As the facts and the issue involved in the present appeal remains the same as were there before us in the appeal of the revenue for the immediately preceding year i.e ITA 1873/Mum/2020 for A.Y. 2009-10, therefore, our order therein passed shall apply mutatis mutandis for the purpose of disposing off the present appeal. Accordingly, on the same terms, the appeal filed by the revenue for A.Y. 2009-10 in ITA No. 1875/Mum/2020 is dismissed. 8. In the result, both the appeals of the revenue are dismissed. Sd/- Sd/- (AMARJIT SINGH) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated 27.01.2022 Rohit, Sr. PS आदेश की े /Copy of the Order forwarded to : 1. / The Appellant 2. / The Respondent. 3. संबंिधत आयकर आय / The CIT(A) 4. आयकर आय (अपील) / Concerned CIT 5. िवभागीय ि ि ि , आयकर अपीलीय अि करण, अहमदाबाद / DR, ITAT, Mumbai 6. $% फ ईल / Guard file. आदेशानुसार/BY ORDER, स ािपत ित //True Copy// ( Asst. Registrar) ITAT, Mumbai