SHRI NARENDRA S SHAH , MUMBAI V. DCIT, CEN CIR-(2), , MUMBAI

ITA 2003/MUM/2022

AI Insights

The case involves multiple appeals by the assessee, Shri Narendra S Shah, and the Revenue against the orders of the Commissioner of Income-tax (Appeals) for various assessment years from 2009-10 to 2016-17. The appeals were consolidated for convenience and addressed issues related to the validity of reassessment proceedings, additions made under sections 68 and 43CA of the Income Tax Act, and penalties under section 271(1)(c). The Tribunal examined the legal and factual basis of each ground of appeal, considering the submissions, the materials on record, and relevant judicial precedents.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123191 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: B
• Next Hearing Date: 05-06-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 11-08-2022
• Other Referred Cases: Mahalaxmi Sugar Mills Ltd vs CIT, Shreedham Builders vs ACIT, Ankit Financial Services Ltd vs DCIT, Signature Hotels (P) Ltd vs ITO, Piaggio Vehicles P. Ltd vs DCIT, Raymond Woollen Mills Ltd vs ITO, Malegaon Electricity Co. (P) Ltd vs CIT, Yogendrakumar Gupta vs ITO, Anant Shelters Pvt. Ltd vs ITO, Navodaya Castles (P) Ltd vs CIT, Bharat Iron & Steel Industries vs CIT, Tirunelveli Motor Bus Service Co. (P.) Ltd vs CIT, Central Provinces Manganese Ore Co. Ltd vs ITO, Kesaria Tea Co. Ltd vs CIT, Claggett Brachi Co. Ltd vs CIT, M/s KalpanikVyapaar Pvt. Ltd vs ITO
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: REFUND
• Keywords: Reopening of assessment; Unexplained cash credit; Bogus Share capital; Sale consideration of property below Jantri Value; Unexplained expenditure; Capital asset; Business income; Principle of natural justice; Additional evidence; Tangible material; Fair market value; Difference of opinion; Accommodation entries; Retraction; Reason to believe; Change of opinion; Reassessment proceedings; TDS; Set aside; Capital Gains; Bogus
• Section: 68; 148; 37; 132; 271(1)(c); 69C; 43CA; 139; 143(3); 92; 50C; 40(a)(ia); 133(6); 201(1); 64; 113; 43; 48; 194A; 73; 72; 13; 153; 119; 22; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “B” MUMBAI BEFORE SHRI VIKAS AWASTHY (JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) ITA Nos. 2005 & 2006, 2007, 2003, 2004/MUM/2022 Assessment Years: 2009-10, 2014-15, 2015-16, 2016-17 Shri Narendra S Shah (presently Jurisdiction with DCIT, Central Circle-2(2), Mumbai) B-10, Blue Diamond, Chhatrapati Sivaji Road No. 4, Dahisar (E), Mumbai-400068. Vs. Asst. CIT, Circle-32(2), Kautilaya Bhavan, BKC, Mumbai-400051. PAN No. AANPS 0866 M Appellant Respondent ITA Nos. 2566, 2315/MUM/2022 Assessment Year: 2013-14, 2016-17 Dy. CIT, Central Circle-2(2), Old CGO Building, 806, 8 th floor, M.K. Road, Mumbai-400020. Vs. Shri Narendra S Shah, A-10, Blue Diamond CHS, C.S. Complex Road No. 4, Dahisar (East), Mumbai-400068. PAN No. AANPS 0866 M Appellant Respondent Assessee by : Karan Jain Revenue by : Kamble Minal Mohan, Date of Hearing : 06/06/2023 Date of pronouncement : 30/06/2023 ORDER PER OM PRAKASH KANT, AM These appeals by the assessee and the Revenue are directed against separate orders passed by the Ld. First Appellate Authority i.e.Ld Commissioner of Income-tax (appeals) for various assessment years from 2009-10 to 2016 single assessee, same were heard together and disposed off by way of this consolidated order for convenience. 2. Firstly, we take up the appeal of the assessee in ITA No. 2006/Mum/2022 for assessment year 2009 arising from the assessment 143(3) r.w.s. 147 of the Act. The grounds raised by the assessee are reproduced as under: 1. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the assessment passed u/s 147 of Ld AO without appreciating that the reopening is bad in law and the reason assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and rules made there under. 2. On the facts and in the circumstances of the case in law, the Hon'ble CIT(A) erred in upholding the addition of Rs.24,26, 156/ the said provisions of section 40(a)(ia) of the IT Act 1961 are not applicable to facts of the case and the reason assigned for doing so are wrong a to the Provisions of Income Tax Act and rules made there under. 3. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the penalty initiated by the Ld AO u/s. 271(1)(c) of the IT Act 1961 and the rea wrong and contrary to the provision of Income Tax Act and rules made 3. Briefly stated, facts of the case are that the assessment u/s 143(3) of the Act was completed on 29.12.2011by the As ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 10 to 2016-17. The appeals being connected to ngle assessee, same were heard together and disposed off by way of this consolidated order for convenience. Firstly, we take up the appeal of the assessee in ITA No. 2006/Mum/2022 for assessment year 2009-10. This appeal is arising from the assessment order dated 31/12/2014 143(3) r.w.s. 147 of the Act. The grounds raised by the assessee are reproduced as under: On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the assessment passed u/s 147 of the IT Act 1961 by the Ld AO without appreciating that the reopening is bad in law and the reason assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and rules made there under. On the facts and in the circumstances of the case in law, the Hon'ble CIT(A) erred in upholding the addition of Rs.24,26, 156/- by not appreciating that the said provisions of section 40(a)(ia) of the IT Act 1961 are not applicable to facts of the case and the reason assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and rules made there under. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the penalty initiated by the Ld AO u/s. 271(1)(c) of the IT Act 1961 and the reason assigned for doing so are wrong and contrary to the provision of Income Tax Act and rules made there under. Briefly stated, facts of the case are that in the case of assessment u/s 143(3) of the Act was completed on the Assessing Officer at total income Shri Narendra S Shah 2 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 17. The appeals being connected to ngle assessee, same were heard together and disposed off by way Firstly, we take up the appeal of the assessee in ITA No. 10. This appeal is 31/12/2014passed u/s 143(3) r.w.s. 147 of the Act. The grounds raised by the assessee are On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the the IT Act 1961 by the Ld AO without appreciating that the reopening is bad in law and the reason assigned for doing so are wrong and contrary to the Provisions of Income Tax On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the by not appreciating that the said provisions of section 40(a)(ia) of the IT Act 1961 are not applicable to facts of the case and the nd contrary to the Provisions of Income Tax Act and rules made On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the penalty initiated by the Ld AO u/s. 271(1)(c) of the IT son assigned for doing so are wrong and contrary to the provision of Income Tax Act in the case of assessee, assessment u/s 143(3) of the Act was completed on total income of Rs.11,31,13,070/-,as declared by the assessee in the return of income filed on 30.09.2009. The case of the assessee was reopened by way of issue of notice u/s 148 of the Income dated 25.03.2014. In the reasons recorded, the Assessing Officer noted that tax was not deducted by the assessee on the interest payment to share turnover of assessee during the asse immediately earlier year, being Rs.40,00,000/-. The Assessing Officer accordingly disallowed the interest payment of Rs.24,26,156/ the Act. On further appeal, the L reassessment proceedings as well as merit of the Aggrieved, the assessee is before the Tribunal by way of challenging validity of the reassessment as well as the The ground No. 2 of adjudication. The relevant finding of the Ld. CIT(A) on the issue in dispute is reproduced as under: “6.2 Decision: case, submissions of the Appellant, the obse A contained in the assessment order and the other materials on record on this issue. The only issue arises in this appeal of the appellant is regarding disallowances of interest paid u/s 40(a)(ia) of the Income Tax Act. The case was reopene escapement of income of Rs. 24,26,156/ 40(a)(ia) of the IT Act 1961. The objection filed for reopening ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 as against returned loss of Rs.2,12,78,495/ declared by the assessee in the return of income filed on 30.09.2009. The case of the assessee was reopened by way of issue of notice u/s 148 of the Income-tax Act, 1961 (in short ‘the Act’) dated 25.03.2014. In the reasons recorded, the Assessing Officer noted that tax was not deducted by the assessee on the interest payment to share broker namely ‘M/s Sherkhan assessee during the assessment year 2008 immediately earlier year, being more than the prescribed limit of . The Assessing Officer accordingly disallowed the payment of Rs.24,26,156/- in terms of section 40(a)(ia) of . On further appeal, the Ld. CIT(A) upheld the validity of the reassessment proceedings as well as merit of the Aggrieved, the assessee is before the Tribunal by way of challenging validity of the reassessment as well as the disallowance the appeal being on merit, it was . The relevant finding of the Ld. CIT(A) on the issue in dispute is reproduced as under: 6.2 Decision:- I have carefully considered the facts of the case, submissions of the Appellant, the observations of the A contained in the assessment order and the other materials on record on this issue. The only issue arises in this appeal of the appellant is regarding disallowances of interest paid u/s 40(a)(ia) of the Income Tax Act. The case was reopened Ws.147 of the Act for the reasons escapement of income of Rs. 24,26,156/-under section 40(a)(ia) of the IT Act 1961. The objection filed for reopening Shri Narendra S Shah 3 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 loss of Rs.2,12,78,495/- declared by the assessee in the return of income filed on 30.09.2009. The case of the assessee was reopened by way of issue x Act, 1961 (in short ‘the Act’) dated 25.03.2014. In the reasons recorded, the Assessing Officer noted that tax was not deducted by the assessee on the interest M/s Sherkhan’ despite the ssment year 2008-09i.e. more than the prescribed limit of . The Assessing Officer accordingly disallowed the in terms of section 40(a)(ia) of d. CIT(A) upheld the validity of the reassessment proceedings as well as merit of the disallowance. Aggrieved, the assessee is before the Tribunal by way of challenging disallowance on merit. was taken firstfor . The relevant finding of the Ld. CIT(A) on the issue in I have carefully considered the facts of the rvations of the A contained in the assessment order and the other materials on record on this issue. The only issue arises in this appeal of the appellant is regarding disallowances of interest paid u/s 40(a)(ia) of the Income Tax Act. The case d Ws.147 of the Act for the reasons under section 40(a)(ia) of the IT Act 1961. The objection filed for reopening ofassessment was disposed of by AO vide speaking order dated 26/09/2014. Further, in response to show c submitted about delayed payment to Share follows: "According to your goodself the reopening is as per law and is based on evidence. Further your goodself has asked the assessee to furnish the reason why disallowance of int should not be made by applying the provisions of section 40lalia) of the IT Act, 1961. It is submitted that the said provisions are not applicable to the facts of the case in view of the following: 1. During the year under consideration assessee had traded as well as made investment in shares & securities through brokers. One such broker through whom assessee had bought share was M/s.Sharekhan. Since the assessee had incurred huge losses in share investment as well as F & 0 trading the financial posit of which he could not make the payment of obligation in time. This fact is supported by the annexed ledger Ale. as per Ex 'A' A perusal of which it is clear that assessee has made the payment belatedly. 2. For delaying he paym compensation of Rs.21,68,826.41 from assessee and balance sun of Rs.2,60,530/ Creditors. The details of which is submitted hereto as per Ex 'B'. 3. The fact that this details was disclosed to the predecessor La. AO please find herewith the details of delayed interest charged by M/s.Sharekhan as per Ex 'C' for you goodself perusal and consideration. The assessee has inadvertently debited the said amount as delayed payment interest in P & L A/c instead of compensatory payment. 4. Since the assessee has already disclosed this fact the impugned acion is mere change of opinion. ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 ofassessment was disposed of by AO vide speaking order dated 26/09/2014. Further, in response to show caused by AO the appellant submitted about delayed payment to Share "According to your goodself the reopening is as per law and is based on evidence. Further your goodself has asked the assessee to furnish the reason why disallowance of int should not be made by applying the provisions of section 40lalia) of the IT Act, 1961. It is submitted that the said provisions are not applicable to the facts of the case in view of the following: 1. During the year under consideration assessee had traded as well as made investment in shares & securities through brokers. One such broker through whom assessee had bought share was M/s.Sharekhan. Since the assessee had incurred huge losses in share investment as well as F & 0 trading the financial position got deteriorated. Because of which he could not make the payment of obligation in time. This fact is supported by the annexed ledger Ale. as per Ex 'A' A perusal of which it is clear that assessee has made the payment belatedly. 2. For delaying he payment Ms. Sharekhan has charged compensation of Rs.21,68,826.41 from assessee and balance sun of Rs.2,60,530/- charged by Sundry loan Creditors. The details of which is submitted hereto as per 3. The fact that this details was disclosed to the essor La. AO please find herewith the details of delayed interest charged by M/s.Sharekhan as per Ex 'C' for you goodself perusal and consideration. The assessee has inadvertently debited the said amount as delayed payment interest in P & L A/c instead of compensatory payment. 4. Since the assessee has already disclosed this fact the impugned acion is mere change of opinion. Shri Narendra S Shah 4 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 ofassessment was disposed of by AO vide speaking order aused by AO the appellant submitted about delayed payment to Share-khan as "According to your goodself the reopening is as per law and is based on evidence. Further your goodself has asked the assessee to furnish the reason why disallowance of interest should not be made by applying the provisions of section 40lalia) of the IT Act, 1961. It is submitted that the said provisions are not applicable to the facts of the case in view 1. During the year under consideration assessee had traded as well as made investment in shares & securities through brokers. One such broker through whom assessee had bought share was M/s.Sharekhan. Since the assessee had incurred huge losses in share investment as well as F ion got deteriorated. Because of which he could not make the payment of obligation in time. This fact is supported by the annexed ledger Ale. as per Ex 'A' A perusal of which it is clear that assessee has ent Ms. Sharekhan has charged compensation of Rs.21,68,826.41 from assessee and charged by Sundry loan Creditors. The details of which is submitted hereto as per 3. The fact that this details was disclosed to the essor La. AO please find herewith the details of delayed interest charged by M/s.Sharekhan as per Ex 'C' The assessee has inadvertently debited the said amount as delayed payment interest in P & L A/c instead of 4. Since the assessee has already disclosed this fact the 5. Without prejudice to the above we have to submit as under: 5.1 It is pertinent to mention that the said expenses are not covered by the provisions of section 40(a)(ia) hence no tax is deductible on the said payment. 5.2 In this regard your goodself attention is drawn to the decision of Hon'ble Supreme Court in the case of Mahalaxmi Sugar Mills Ltd, us CIT 2008 TMI 5833 where in it is interest paid on delayed payment is compensatory in nature. Hence it is akin to compensation and are allowable expenses. By virtue of the fact compensation is different from interest the provisions of section 40(a)ia) are not applicable." Hence, in view of the above the assessee was liable to deduct TDS u/S 1944 on the delayed payments made to M/s.ShareKhan as it is a payment made for fulfilling a contractual obligation with the broker ShareKhan during the normal course of business of interest deduct TDS u/s 194A of I.T Ac 1961. " 6.3 During the appellate proceedings, same submission was filed before me as made before the AO wherein it has relied on some case laws. Basically the argument of appellant is that interest paid on delayed payment is compensatory in nature and are allowable expenses. The AO made the impugned order holding that the appellant was required to deduct tax at source. As regards the appellant it has traded as well made investment i and securities through one such broker M/s. Sharekhan. Further, the appellant could not make the payment of obligation in time for which on delayed payment M/s. Sharekhan charged compensation amount. In this respect the appellant stated that M/s. assessee had bought shares and had incurred huge losses in share investment as well as F & O trading the financial position got deteriorated. Because of which he could not make the payment of obligation in time. From this it appears that, at one instance the appellant has admitted ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 5. Without prejudice to the above we have to submit as 5.1 It is pertinent to mention that the said expenses are not the provisions of section 40(a)(ia) hence no tax is deductible on the said payment. 5.2 In this regard your goodself attention is drawn to the decision of Hon'ble Supreme Court in the case of Mahalaxmi Sugar Mills Ltd, us CIT 2008 TMI 5833 where in it is discussed that portion of interest paid on delayed payment is compensatory in nature. Hence it is akin to compensation and are allowable expenses. By virtue of the fact compensation is different from interest the provisions of section 40(a)ia) are not Hence, in view of the above the assessee was liable to deduct TDS u/S 1944 on the delayed payments made to M/s.ShareKhan as it is a payment made for fulfilling a contractual obligation with the broker ShareKhan during the normal course of business and the payment is in the nature of interest deduct TDS u/s 194A of I.T Ac 1961. " 6.3 During the appellate proceedings, same submission was filed before me as made before the AO wherein it has relied on some case laws. Basically the argument of is that interest paid on delayed payment is compensatory in nature and are allowable expenses. The AO made the impugned order holding that the appellant was required to deduct tax at source. As regards the appellant it has traded as well made investment i and securities through one such broker M/s. Sharekhan. Further, the appellant could not make the payment of obligation in time for which on delayed payment M/s. Sharekhan charged compensation amount. In this respect the appellant stated that M/s. Sharekhan through whom assessee had bought shares and had incurred huge losses in share investment as well as F & O trading the financial position got deteriorated. Because of which he could not make the payment of obligation in time. From this it that, at one instance the appellant has admitted Shri Narendra S Shah 5 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 5. Without prejudice to the above we have to submit as 5.1 It is pertinent to mention that the said expenses are not the provisions of section 40(a)(ia) hence no tax is 5.2 In this regard your goodself attention is drawn to the decision of Hon'ble Supreme Court in the case of Mahalaxmi discussed that portion of interest paid on delayed payment is compensatory in nature. Hence it is akin to compensation and are allowable expenses. By virtue of the fact compensation is different from interest the provisions of section 40(a)ia) are not Hence, in view of the above the assessee was liable to deduct TDS u/S 1944 on the delayed payments made to M/s.ShareKhan as it is a payment made for fulfilling a contractual obligation with the broker ShareKhan during the and the payment is in the nature 6.3 During the appellate proceedings, same submission was filed before me as made before the AO wherein it has relied on some case laws. Basically the argument of is that interest paid on delayed payment is compensatory in nature and are allowable expenses. The AO made the impugned order holding that the appellant was required to deduct tax at source. As regards the appellant it has traded as well made investment in shares and securities through one such broker M/s. Sharekhan. Further, the appellant could not make the payment of obligation in time for which on delayed payment M/s. Sharekhan charged compensation amount. In this respect Sharekhan through whom assessee had bought shares and had incurred huge losses in share investment as well as F & O trading the financial position got deteriorated. Because of which he could not make the payment of obligation in time. From this it that, at one instance the appellant has admitted that the obligation amount was not paid in time. Thus, the payment was delayed by appellant and it has further failed to deduct TDS on paid interest and thereby gave new name for interest paid contending tha compensation amount. Definitely, the appellant has failed to deduct tax on interest paid which is required as per provisions of section 6.4 In this respect the appellant has relied on some case laws. It has relled on Supreme Court in the case of Mahalaxmi Sugar Mills Ltd W/s. CIT 2008 TMI 5833 and contended that in this order I Is discussed that portion of interest paid on delayed payment is compensatory I nature. fiowever, the contention of the appellant is not tenable. The Issue discussed in this judgement is based on the interest payable on arrears of cess under 8.3(3) of the Act and specific direction is given that the interest payable is in the nature of compensation paid to the Gover facts of the case in present appeal is totally different and appellant cannot take shelter of this decision. 6.5 In the present case, the appellant has made delayed payment of interest for trading in, shares and s The claim of the appellant that to treat this payment as compensation amount cannot be accepted in the absence of any evidence. The A.0. has rightly treated it to be the payment of interest charges and invoked the provisions of section 1944 of t the department if the appellant does not pay TDS due to the government as per the provisions of section 1944 of the Income Tax Act by misinterpreting obligation money as compensation amount.However, itis wort making submission on piece of paper cannot absolve the appellant from its responsibility in submitting necessary details. Since assessee has failed to deduct TDS on interest paid, the interest expense has been disallowed by the AO u/s. 40(a)(ia). At appellate stage the appellant has file submission as filed before the AO. However failed for compliance with the genuineness of the transactions and TDS provisions. Considering the above facts and the failure on part of the assessee to justify transactions and compliance with TDS provisions, the ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 that the obligation amount was not paid in time. Thus, the payment was delayed by appellant and it has further failed to deduct TDS on paid interest and thereby gave new name for interest paid contending that this payment is compensation amount. Definitely, the appellant has failed to deduct tax on interest paid which is required as per of section 194A of the IT. Act. 6.4 In this respect the appellant has relied on some case laws. It has relled on the judgement given by Hon'ble Supreme Court in the case of Mahalaxmi Sugar Mills Ltd W/s. CIT 2008 TMI 5833 and contended that in this order I Is discussed that portion of interest paid on delayed payment is compensatory I nature. fiowever, the contention of the appellant is not tenable. The Issue discussed in this judgement is based on the interest payable on arrears of cess under 8.3(3) of the Act and specific direction is given that the interest payable is in the nature of compensation paid to the Government for delay I the payment of cess. The facts of the case in present appeal is totally different and appellant cannot take shelter of this decision. 6.5 In the present case, the appellant has made delayed payment of interest for trading in, shares and s The claim of the appellant that to treat this payment as compensation amount cannot be accepted in the absence of any evidence. The A.0. has rightly treated it to be the payment of interest charges and invoked the provisions of section 1944 of the IT. Act. In any case it will be injustice to the department if the appellant does not pay TDS due to the government as per the provisions of section 1944 of the Income Tax Act by misinterpreting obligation money as compensation amount.However, itis worth mentioning that making submission on piece of paper cannot absolve the appellant from its responsibility in submitting necessary details. Since assessee has failed to deduct TDS on interest paid, the interest expense has been disallowed by the AO (a)(ia). At appellate stage the appellant has file submission as filed before the AO. However failed for compliance with the genuineness of the transactions and TDS provisions. Considering the above facts and the failure on part of the assessee to justify the genuineness of above transactions and compliance with TDS provisions, the Shri Narendra S Shah 6 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 that the obligation amount was not paid in time. Thus, the payment was delayed by appellant and it has further failed to deduct TDS on paid interest and thereby gave new name t this payment is compensation amount. Definitely, the appellant has failed to deduct tax on interest paid which is required as per 6.4 In this respect the appellant has relied on some case- the judgement given by Hon'ble Supreme Court in the case of Mahalaxmi Sugar Mills Ltd W/s. CIT 2008 TMI 5833 and contended that in this order I Is discussed that portion of interest paid on delayed payment is compensatory I nature. fiowever, the contention of the appellant is not tenable. The Issue discussed in this judgement is based on the interest payable on arrears of cess under 8.3(3) of the Act and specific direction is given that the interest payable is in the nature of compensation nment for delay I the payment of cess. The facts of the case in present appeal is totally different and 6.5 In the present case, the appellant has made delayed payment of interest for trading in, shares and securities. The claim of the appellant that to treat this payment as compensation amount cannot be accepted in the absence of any evidence. The A.0. has rightly treated it to be the payment of interest charges and invoked the provisions of he IT. Act. In any case it will be injustice to the department if the appellant does not pay TDS due to the government as per the provisions of section 1944 of the Income Tax Act by misinterpreting obligation money as h mentioning that making submission on piece of paper cannot absolve the appellant from its responsibility in submitting necessary details. Since assessee has failed to deduct TDS on interest paid, the interest expense has been disallowed by the AO (a)(ia). At appellate stage the appellant has file submission as filed before the AO. However failed for compliance with the genuineness of the transactions and TDS provisions. Considering the above facts and the failure the genuineness of above transactions and compliance with TDS provisions, the action of the AO is justifiable. Before me, in appellate proceedings, no evidence or explanation has been furnished by the assessee as to why the provisions of section 40(a)(ia) are not applicable or whether there were any inconsistencies to the contrary, Ihave no reason to deviate from the position taken by the AO. Therefore, the addition made by the AO is confirmed. Consequently, ground no. 2 stand Dismissed. 4. We have heard r dispute and perused the relevant material on record. Before us, the Ld. Counsel of the assessee submitted that the payee Sherkhan’ has already paid taxes on the said receipt and therefore, assessee is no more assessee in default under the proviso to section 40(a)(ia) of the Act. The Ld. Counsel of the assessee submitted that the assessee is willing to prescribed form to the effect that payee has furnished his ret income u/s 139 and taken into account said sum on interest while computing his return of income and also paid tax due on the income declared in the return of income as required under proviso to section 40(a)(ia) read with proviso to section 201(1) view of undertaking given by the Ld. Counsel of the assessee feel appropriate to restore this issue back to the file of the Ld. Assessing Officer for deciding afresh after verifying the certificate which will be filed by the assessee befo section 40(a)(i) read with proviso to section 201(1) of the Act. The ground No. 2 of the appeal of the assessee is accordingly allowed for statistical purposes. ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 action of the AO is justifiable. Before me, in appellate proceedings, no evidence or explanation has been furnished by the assessee as to why the provisions of section 40(a)(ia) are not applicable or whether there were any inconsistencies to the contrary, Ihave no reason to deviate from the position taken by the AO. Therefore, the addition made by the AO is confirmed. Consequently, ground no. 2 stand Dismissed.” We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. Before us, the Ld. Counsel of the assessee submitted that the payee has already paid taxes on the said receipt and therefore, more assessee in default under the proviso to section ) of the Act. The Ld. Counsel of the assessee submitted that the assessee is willing to furnish a certificate from an accountant in prescribed form to the effect that payee has furnished his ret income u/s 139 and taken into account said sum on interest while computing his return of income and also paid tax due on the income declared in the return of income as required under proviso ) read with proviso to section 201(1) view of undertaking given by the Ld. Counsel of the assessee feel appropriate to restore this issue back to the file of the Ld. Assessing Officer for deciding afresh after verifying the certificate which will be filed by the assessee before him as per the proviso to section 40(a)(i) read with proviso to section 201(1) of the Act. The ground No. 2 of the appeal of the assessee is accordingly allowed for statistical purposes. Shri Narendra S Shah 7 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 action of the AO is justifiable. Before me, in appellate proceedings, no evidence or explanation has been furnished by the assessee as to why the provisions of section 40(a)(ia) are not applicable or whether there were any inconsistencies to the contrary, Ihave no reason to deviate from the position taken by the AO. Therefore, the addition made by the AO is confirmed. Consequently, ground no. 2 ival submission of the parties on the issue in dispute and perused the relevant material on record. Before us, the Ld. Counsel of the assessee submitted that the payee ‘M/s has already paid taxes on the said receipt and therefore, more assessee in default under the proviso to section ) of the Act. The Ld. Counsel of the assessee submitted that furnish a certificate from an accountant in prescribed form to the effect that payee has furnished his return of income u/s 139 and taken into account said sum on interest while computing his return of income and also paid tax due on the income declared in the return of income as required under proviso ) read with proviso to section 201(1) of the Act. In view of undertaking given by the Ld. Counsel of the assessee, we feel appropriate to restore this issue back to the file of the Ld. Assessing Officer for deciding afresh after verifying the certificate re him as per the proviso to section 40(a)(i) read with proviso to section 201(1) of the Act. The ground No. 2 of the appeal of the assessee is accordingly allowed for 4.1 Since the ground o Assessing Officer, the ground challenging validity of the reassessment is not being adjudicated at this stage being merely academic. The ground No.1 of the appeal is accordingly dismissed as infructuous. 5. In ground No. 3, the assessee has challenged penalty u/s 271(1)(c) of the Act. Since, penalty has not been levied therefore proceedings u/s 271(1)(c) of the Act this stage, the grounds raised is dismissed as infructuous. 6. Now, we take up the appeal of the 2005/Mum/2022 for assessment year 2009 arising from the assessment 143(3) r.w.s. 254 of the Act. The grounds raised by the assessee are reproduced as under: 1. On the facts and in the circu in law, the Hon'ble CIT(A) erred in upholding the addition made of Rs. 19,55,340/ unsecured loan as unexplained cash credit u/s 68 of the IT Act 1961 without assigning valid reason and the reason assigned for d to the Provisions of Income Tax Act and rules made there under. 2. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the penalty initiated by the Ld AO u/s. 271 (1)(c) of the IT Act 1961 and the reason assigned for doing so are wrong and contrary to the provision of Income Tax Act and rules made there under. ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 Since the ground on merit has been restored to the file of t Assessing Officer, the ground challenging validity of the reassessment is not being adjudicated at this stage being merely academic. The ground No.1 of the appeal is accordingly dismissed In ground No. 3, the assessee has challenged penalty u/s 271(1)(c) of the Act. Since, penalty has not been levied therefore proceedings u/s 271(1)(c) of the Act being grounds raised is dismissed as infructuous. we take up the appeal of the assessee 2005/Mum/2022 for assessment year 2009-10. This appeal is arising from the assessment order dated 30/03/2016 143(3) r.w.s. 254 of the Act. The grounds raised by the assessee are reproduced as under: On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the addition made of Rs. 19,55,340/- by wrongly treating unsecured loan as unexplained cash credit u/s 68 of the IT Act 1961 without assigning valid reason and the reason assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and rules made there under. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the penalty initiated by the Ld AO u/s. 271 (1)(c) of the IT Act 1961 and the reason assigned for doing so are wrong and contrary to the provision of Income Tax Act and rules made there under. Shri Narendra S Shah 8 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 merit has been restored to the file of the Assessing Officer, the ground challenging validity of the reassessment is not being adjudicated at this stage being merely academic. The ground No.1 of the appeal is accordingly dismissed In ground No. 3, the assessee has challenged initiation of penalty u/s 271(1)(c) of the Act. Since, penalty has not been levied , being premature at grounds raised is dismissed as infructuous. having ITA No. 10. This appeal is 30/03/2016passed u/s 143(3) r.w.s. 254 of the Act. The grounds raised by the assessee are mstances of the case and in law, the Hon'ble CIT(A) erred in upholding the by wrongly treating unsecured loan as unexplained cash credit u/s 68 of the IT Act 1961 without assigning valid reason and the oing so are wrong and contrary to the Provisions of Income Tax Act and rules made On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the penalty initiated by the Ld AO u/s. 271 (1)(c) of the IT Act 1961 and the reason assigned for doing so are wrong and contrary to the provision of Income Tax Act 7. The brief facts qua the issue in dispute are that against the assessment order passed u/s 143(3) of the Act dated 29.12.2 the assessee filed appeal before the Ld. CIT(A) succeed. Against the order passed by the Ld. CIT(A), the assessee preferred appeal before the Income Tax Appellate Tribunal (ITAT) The ITAT in its order 6904/Mum/2012restored the issue alongwith other addition afresh after providing sufficient opportunity to the assessee. Consequently, the Assessing Officer has passed the impugned assessment order dated additions. On further appeal, the Ld. CIT(A) allowed part relief to the assessee. Against the finding of the Ld. CIT(A), the assessee is before only in respect of addition of Rs.19,55,340/ theAct,which was made by the Assessing Officer for unsecured loans from seven parties. The relevant finding of the Assessing Officer in relation to addition is “c) Rs. 19,55,340/ Pages 88 lo 109 refers to addition of Rs. 19,55,000/ account of unproved loans which are claimed to be from 7 persons. In whose case loan confirmation were not filed. Now atso the loan confirmation being the primary document also not filed in respect of Shri Dhiren Shah, Shri Lalit Motwani, M/s Shradha Car further evidence to prove the genuineness of loan has been filed. In case of, M/s Mangesh Construction loan confirmation and affidavits filed now. The assessce has not furnished the bank account to verify the genuineness of ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 The brief facts qua the issue in dispute are that against the assessment order passed u/s 143(3) of the Act dated 29.12.2 the assessee filed appeal before the Ld. CIT(A), however could not Against the order passed by the Ld. CIT(A), the assessee preferred appeal before the Income Tax Appellate Tribunal (ITAT) he ITAT in its order dated 06/08/2015 restored the issue of addition u/s 68 of the Act alongwith other addition back to the Assessing Officer for deciding afresh after providing sufficient opportunity to the assessee. Consequently, the Assessing Officer has passed the impugned dated 30.03.2016, wherein he made various additions. On further appeal, the Ld. CIT(A) allowed part relief to gainst the finding of the Ld. CIT(A), the assessee is before only in respect of addition of Rs.19,55,340/ which was made by the Assessing Officer for unsecured loans from seven parties. The relevant finding of the Assessing addition is reproduced as under: “c) Rs. 19,55,340/ - Pages 88 lo 109 refers to addition of Rs. 19,55,000/ account of unproved loans which are claimed to be from 7 persons. In whose case loan confirmation were not filed. Now atso the loan confirmation being the primary document also not filed in respect of Shri Dhiren Shah, Shri Lalit Motwani, M/s Shradha Carrier and pectaustChorehanadna further evidence to prove the genuineness of loan has been filed. In case of, M/s Mangesh Construction loan confirmation and affidavits filed now. The assessce has not furnished the bank account to verify the genuineness of Shri Narendra S Shah 9 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 The brief facts qua the issue in dispute are that against the assessment order passed u/s 143(3) of the Act dated 29.12.2011, , however could not Against the order passed by the Ld. CIT(A), the assessee preferred appeal before the Income Tax Appellate Tribunal (ITAT). in ITA No. of addition u/s 68 of the Act back to the Assessing Officer for deciding afresh after providing sufficient opportunity to the assessee. Consequently, the Assessing Officer has passed the impugned 30.03.2016, wherein he made various additions. On further appeal, the Ld. CIT(A) allowed part relief to gainst the finding of the Ld. CIT(A), the assessee is before only in respect of addition of Rs.19,55,340/- u/s 68 of which was made by the Assessing Officer for unsecured loans from seven parties. The relevant finding of the Assessing reproduced as under: Pages 88 lo 109 refers to addition of Rs. 19,55,000/- on account of unproved loans which are claimed to be from 7 persons. In whose case loan confirmation were not filed. Now atso the loan confirmation being the primary document also not filed in respect of Shri Dhiren Shah, Shri Lalit rier and pectaustChorehanadna further evidence to prove the genuineness of loan has been filed. In case of, M/s Mangesh Construction loan confirmation and affidavits filed now. The assessce has not furnished the bank account to verify the genuineness of transaction and creditworthiness of the loan creditors. In respect of Shri Kishor Mehta loan confirmation has been filed but no bank account details filed. The assessee has not furnished the bank account to verify the genuineness of transaction and creditwor respect of Shri RamsahayNishabh the assessee has filed unsigned loan confirmation and also not furnished the bank account to verify the genuineness of transaction and creditworthiness of the loan creditors. Thus, the asses has failed to prove the genuineness of unsecured loans of which the onus lies on the assessee to prove the identity of the person, genuineness of the transactions and credit worthiness of the loan creditors Considering the facts of the case, the additi Hence, after careful consideration of the submissions/ documents filed, the assessee's claim of genuineness of loan is not accepted and the addition made in the original assessment totaling to Rs. 1,03,86,340/ cash credit u/s 68 on account of unproved loans is sustained.” 8. Further, the Ld. CIT(A) upheld the addition observing as under: “6.2.5. Rs. 19,55,340/ parties The observation of the A0 is in page no. 4 of the order. appellant has commented that for making the addition, the AO has taken casual approach and neither tried further to ascertain the truthfulness of confirmation and other details filed nor issued notice us. 133(6) of the Act before arriving at the conclu From the order, I find that the AO has concluded that no loan confirmation was filed for four persons. Also bank accounts are not filed with respect to the three persons, whose confirmations are filed. On verification of the additional evidences, I f and the observations of the AO are correct. These are ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 ansaction and creditworthiness of the loan creditors. In respect of Shri Kishor Mehta loan confirmation has been filed but no bank account details filed. The assessee has not furnished the bank account to verify the genuineness of transaction and creditworthiness of the loan creditors. In respect of Shri RamsahayNishabh the assessee has filed unsigned loan confirmation and also not furnished the bank account to verify the genuineness of transaction and creditworthiness of the loan creditors. Thus, the asses has failed to prove the genuineness of unsecured loans of which the onus lies on the assessee to prove the identity of the person, genuineness of the transactions and credit worthiness of the loan creditors Considering the facts of the case, the addition made of Rs. 19,55,000/- is retained. Hence, after careful consideration of the submissions/ documents filed, the assessee's claim of genuineness of loan is not accepted and the addition made in the original assessment totaling to Rs. 1,03,86,340/- as unexplained cash credit u/s 68 on account of unproved loans is Further, the Ld. CIT(A) upheld the addition observing as 6.2.5. Rs. 19,55,340/- on account of loan from 7 The observation of the A0 is in page no. 4 of the order. appellant has commented that for making the addition, the AO has taken casual approach and neither tried further to ascertain the truthfulness of confirmation and other details filed nor issued notice us. 133(6) of the Act before arriving at the conclusion. From the order, I find that the AO has concluded that no loan confirmation was filed for four persons. Also bank accounts are not filed with respect to the three persons, whose confirmations are filed. On verification of the additional evidences, I find that these lacunas still exist and the observations of the AO are correct. These are Shri Narendra S Shah 10 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 ansaction and creditworthiness of the loan creditors. In respect of Shri Kishor Mehta loan confirmation has been filed but no bank account details filed. The assessee has not furnished the bank account to verify the genuineness of thiness of the loan creditors. In respect of Shri RamsahayNishabh the assessee has filed unsigned loan confirmation and also not furnished the bank account to verify the genuineness of transaction and creditworthiness of the loan creditors. Thus, the assessee has failed to prove the genuineness of unsecured loans of which the onus lies on the assessee to prove the identity of the person, genuineness of the transactions and credit worthiness of the loan creditors Considering the facts of the is retained.” Hence, after careful consideration of the submissions/ documents filed, the assessee's claim of genuineness of loan is not accepted and the addition made in the original nexplained cash credit u/s 68 on account of unproved loans is Further, the Ld. CIT(A) upheld the addition observing as on account of loan from 7 The observation of the A0 is in page no. 4 of the order. The appellant has commented that for making the addition, the AO has taken casual approach and neither tried further to ascertain the truthfulness of confirmation and other details filed nor issued notice us. 133(6) of the Act before arriving From the order, I find that the AO has concluded that no loan confirmation was filed for four persons. Also bank accounts are not filed with respect to the three persons, whose confirmations are filed. On verification of the ind that these lacunas still exist and the observations of the AO are correct. These are primary documents to establish genuineness of transactions. Hence, addition of Rs. 19,55,340/ ground of appeal No. 1 is partly allowed. 9. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. Before us, the Ld. Counsel of the assessee has filed lower authorities in respect of seven unsecured loan parties is reproduced as under: C-1 Dhiren Shah 45340 C-2 Kishor T Mehta 125000 C-3 Late Lalit Motani Dev Ashish 335000 C-4 Mangesh Construction 800000 C-5 Ramshay Nisad 50000 C-6 Shraddha Carrier 500000 C-7 Samiullah Chaudhary 100000 Total 10386340 ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 primary documents to establish genuineness of transactions. Hence, addition of Rs. 19,55,340/- is confirmed. Thus, ground of appeal No. 1 is partly allowed.” e heard rival submission of the parties on the issue in dispute and perused the relevant material on record. Before us, the Ld. Counsel of the assessee has filed a list of documents in respect of seven unsecured loan parties is reproduced as under: 45340 2008-09 45340 2009-10 568000 Opening 125000 2008-09 693000 2009-10 693000 693000 335000 2008-09 255000 2009-10 80000 2010-11 335000 335000 800000 2008-09 307606 2009-10 -492394 2008-09 800000 307606 50000 2008-09 50000 2009-10 50000 50000 500000 03/12/2 008 500000 01/12/2 008 100000 2008-09 175000 2009-10 275000 2009-10 Land Sale Income 275000 275000 10386340 Shri Narendra S Shah 11 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 primary documents to establish genuineness of is confirmed. Thus, e heard rival submission of the parties on the issue in dispute and perused the relevant material on record. Before us, the documents filed before in respect of seven unsecured loan parties, which Ledger Confirmation PAN CARD Ledger Ledger Confirmation He has expired Account Confirmation Ledger Affidavit Unsigned Confirmation Ledger 01/12/2Ledger Bank Statement Ledger Land Sale ITR of AY 2010-11 Showing Part of Sale of land income 9.1 On perusal of the documents filed in respect of Mehta’ amounting to Rs. filed confirmation, PAN card etc. way of inquiry u/s 133(6) or 131 has been carried out by the Assessing Officer. Similarly, in the case ‘Magnesh Construction has filed confirmation, affidavit and ledger account of the said party. The Assessing Officer has not carried out respect of said party him. In respect of other parties account without any PAN card or other verifiable therefore, to the extent of two parties namely (Rs. 1,25,000/-) and delete the addition sustained by the Ld. CIT(A). However, in respect of balance parties, finding of the Ld. CIT(A) the ground of appeal of the assessee is allow 10. The ground No. 2 of the appeal being related to initiation of penalty, which being premature at this stage, same is dismissed as infructuous. 11. Now, we take up the appeal of the Revenue for assessment year 2013-14 in ITA No. 2566/Mum/202 the Revenue are reproduced as under: ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 erusal of the documents filed in respect of to Rs.1,25,000/-, we find that the said party has AN card etc. details, however no verification by way of inquiry u/s 133(6) or 131 has been carried out by the essing Officer. Similarly, in the case on unsecured loan from Construction’ amounting to Rs.8,00,000/ has filed confirmation, affidavit and ledger account of the said party. The Assessing Officer has not carried out espect of said party, althoughverifiable details were available with n respect of other parties, the assessee has filed account without any PAN card or other verifiable , to the extent of two parties namely Sh. Kisho and Magnum Construction (Rs.8,00,000/ delete the addition sustained by the Ld. CIT(A). However, in respect finding of the Ld. CIT(A) is upheld. Accordingly, the ground of appeal of the assessee is allowed partly. The ground No. 2 of the appeal being related to initiation of penalty, which being premature at this stage, same is dismissed as we take up the appeal of the Revenue for assessment 14 in ITA No. 2566/Mum/2022. The grounds raised by the Revenue are reproduced as under: Shri Narendra S Shah 12 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 erusal of the documents filed in respect of ‘Kishore T e find that the said party has no verification by way of inquiry u/s 133(6) or 131 has been carried out by the on unsecured loan from amounting to Rs.8,00,000/-, the assessee has filed confirmation, affidavit and ledger account of the said party. The Assessing Officer has not carried out any inquiry in details were available with assessee has filed only ledger account without any PAN card or other verifiable information, Kishore T Mehta Rs.8,00,000/-), we delete the addition sustained by the Ld. CIT(A). However, in respect upheld. Accordingly, ed partly. The ground No. 2 of the appeal being related to initiation of penalty, which being premature at this stage, same is dismissed as we take up the appeal of the Revenue for assessment 2. The grounds raised by 1. 1 Whether the Ld. CIT(A) has erred both in law and on facts in deleting the addition 5,50,07,297/ 2013-14 Towards addition made on account of unexplained cash credit u/s 68 of the I 2. 2 Whether the Ld. CIT(A) has erred both in law and on facts in deleting the addition Rs. 25,54,440/ AY 2013 STCG. 3. 3 Whether, the Ld. CIT(A) has erred both in law and on facts in failing to appreci assessing officer and overlooking the finding made during the assessment proceedings. 4. 4 Whether the Ld. CIT(A) has failed to appreciate the details/justification given by the AO and therefore addition made and that the AO had establ transactions were not genuine and thus the addition made was correct by giving detailed clarification after through verification of the submission made by the assessee. 12. The brief facts qua the ground No. 1 of the appeal of the Revenue are that the Assessing Officer alleged that assessee received accommodation entries in the form of unsecured loan from four parties, which were managed and operated by Kumar Jain’. The Assessing Officer reopened made the addition of Rs.5,50,07,297/ unsecured loan parties passed u/s 147 read with section 143(3) of the Ld. CIT(A) in detailed finding deleted the addition observing as under: “6.2 Appellate of the case, submissions of the assessee and material on record. It is relevant to mention here that the A0 in his assessment order, in para 2, has discussed this issue. ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 1 Whether the Ld. CIT(A) has erred both in law and on facts in deleting the addition 5,50,07,297/- 14 Towards addition made on account of unexplained cash credit u/s 68 of the IT Act, 1961 2 Whether the Ld. CIT(A) has erred both in law and on facts in deleting the addition Rs. 25,54,440/ AY 2013-14 towards addition made on account of STCG. 3 Whether, the Ld. CIT(A) has erred both in law and on facts in failing to appreciate the findings of the assessing officer and overlooking the finding made during the assessment proceedings. 4 Whether the Ld. CIT(A) has failed to appreciate the details/justification given by the AO and therefore addition made and that the AO had establ transactions were not genuine and thus the addition made was correct by giving detailed clarification after through verification of the submission made by the assessee. The brief facts qua the ground No. 1 of the appeal of the at the Assessing Officer alleged that assessee received accommodation entries in the form of unsecured loan from which were managed and operated by . The Assessing Officer reopened the assessment of Rs.5,50,07,297/- in respect of those four unsecured loan parties in assessment order dated 11/12/2017 passed u/s 147 read with section 143(3) of the Act. Ld. CIT(A) in detailed finding deleted the addition observing as 6.2 Appellate Decision: I have carefully considered the facts of the case, submissions of the assessee and material on record. It is relevant to mention here that the A0 in his assessment order, in para 2, has discussed this issue. Shri Narendra S Shah 13 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 1 Whether the Ld. CIT(A) has erred both in law and on - for thel-AY 14 Towards addition made on account of T Act, 1961 2 Whether the Ld. CIT(A) has erred both in law and on facts in deleting the addition Rs. 25,54,440/- for the 14 towards addition made on account of 3 Whether, the Ld. CIT(A) has erred both in law and on ate the findings of the assessing officer and overlooking the finding made 4 Whether the Ld. CIT(A) has failed to appreciate the details/justification given by the AO and therefore addition made and that the AO had established than transactions were not genuine and thus the addition made was correct by giving detailed clarification after through verification of the submission made by the The brief facts qua the ground No. 1 of the appeal of the at the Assessing Officer alleged that assessee received accommodation entries in the form of unsecured loan from which were managed and operated by ‘Shri Pravin the assessment and in respect of those four dated 11/12/2017 Act. However, the Ld. CIT(A) in detailed finding deleted the addition observing as Decision: I have carefully considered the facts of the case, submissions of the assessee and material on record. It is relevant to mention here that the A0 in his assessment order, in para 2, has discussed this issue. Information was received that a searc the IT Act was conducted in the case of one Shri Pravin Kumar Jain and the search action resulted in collection of the evidence and other findings which led the AO to believe that Shri Pravin Kumar Jain was engaged in providing accommodation entries of various natures like unsecured loans, bogus share application/ capital and bogus sales and purchases to the beneficiaries spread throughout India. According to the AO, from the information and material received from Investigation Wing, the appellant isone of the beneficiaries and obtained accommodation entries in the form of bogus unsecured loan from M Olive Overseas Pvt Ltd, M/s Pragti Gems Pvt ltd, M/s Nakshatra Business Pvt Ltd and M/s Atharv Business Pvt ltd, concerns that are controlled and managed by Shri Pravin Kumar Jain. 6.3 It is mentioned in the assessment order that with a view to verify the identity, creditworthiness of the parties and genuineness of the transactions, summon us 131 of the Act dated 23-08 presence on 28 received a letter on 28 adjournment. Later on a statement was recorded under oath u/s 131 of the Act of the appellant the statement the appellant confirmed the factum of acceptance of loans from M/s Atharv Business Pvt. Ltd., M/s Olive Overseas Pvt. Ltd. and M/s Pragati Gems Pvt.Ltd. As regards the loans from M/s Nakshtra Business Pvt. Ltd., appellant stated that he did not remember exactly when had he accepted the loan from the said concern and failed to provide the requisite details. It is also mentioned in the assessment order that loan confirmation of M/s Nakshatra Business Pvt. Ltd. Have been f original assessment proceedings completed us 143(3) of the Act. According to the AO, the appellant has failed to prove the identity, creditworthiness and genuineness of the said transaction casted upon him. Finally, addition of 5,50,07,297 / from M/s Olive Overseas Pvt Ltd, M/s Prati Gems Pvt It, M/s Nakshatra Business Pt Ltd and M/s Atharv Business Pvt Ltd. ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 Information was received that a search under Section 132 of the IT Act was conducted in the case of one Shri Pravin Kumar Jain and the search action resulted in collection of the evidence and other findings which led the AO to believe that Shri Pravin Kumar Jain was engaged in providing modation entries of various natures like unsecured loans, bogus share application/ capital and bogus sales and purchases to the beneficiaries spread throughout India. According to the AO, from the information and material received from Investigation Wing, Mumbai, it was found that the appellant isone of the beneficiaries and obtained accommodation entries in the form of bogus unsecured loan from M Olive Overseas Pvt Ltd, M/s Pragti Gems Pvt ltd, M/s Nakshatra Business Pvt Ltd and M/s Atharv Business Pvt , concerns that are controlled and managed by Shri Pravin 6.3 It is mentioned in the assessment order that with a view to verify the identity, creditworthiness of the parties and genuineness of the transactions, summon us 131 of the Act 08-2017 was issued to the appellant, requiring his presence on 28-08-2017. In response to the same, the AO received a letter on 28-08-2017, requesting for short adjournment. Later on a statement was recorded under oath u/s 131 of the Act of the appellant Shri Narendra Shah. In the statement the appellant confirmed the factum of acceptance of loans from M/s Atharv Business Pvt. Ltd., M/s Olive Overseas Pvt. Ltd. and M/s Pragati Gems Pvt.Ltd. As regards the loans from M/s Nakshtra Business Pvt. Ltd., ant stated that he did not remember exactly when had he accepted the loan from the said concern and failed to provide the requisite details. It is also mentioned in the assessment order that loan confirmation of M/s Nakshatra Business Pvt. Ltd. Have been found in the case records of original assessment proceedings completed us 143(3) of the Act. According to the AO, the appellant has failed to prove the identity, creditworthiness and genuineness of the said transaction casted upon him. Finally, addition of 5,50,07,297 /- is made on account loans being accepted from M/s Olive Overseas Pvt Ltd, M/s Prati Gems Pvt It, M/s Nakshatra Business Pt Ltd and M/s Atharv Business Pvt Shri Narendra S Shah 14 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 h under Section 132 of the IT Act was conducted in the case of one Shri Pravin Kumar Jain and the search action resulted in collection of the evidence and other findings which led the AO to believe that Shri Pravin Kumar Jain was engaged in providing modation entries of various natures like unsecured loans, bogus share application/ capital and bogus sales and purchases to the beneficiaries spread throughout India. According to the AO, from the information and material Mumbai, it was found that the appellant isone of the beneficiaries and obtained accommodation entries in the form of bogus unsecured loan from M Olive Overseas Pvt Ltd, M/s Pragti Gems Pvt ltd, M/s Nakshatra Business Pvt Ltd and M/s Atharv Business Pvt , concerns that are controlled and managed by Shri Pravin 6.3 It is mentioned in the assessment order that with a view to verify the identity, creditworthiness of the parties and genuineness of the transactions, summon us 131 of the Act 2017 was issued to the appellant, requiring his 2017. In response to the same, the AO 2017, requesting for short adjournment. Later on a statement was recorded under oath Shri Narendra Shah. In the statement the appellant confirmed the factum of acceptance of loans from M/s Atharv Business Pvt. Ltd., M/s Olive Overseas Pvt. Ltd. and M/s Pragati Gems Pvt.Ltd. As regards the loans from M/s Nakshtra Business Pvt. Ltd., ant stated that he did not remember exactly when had he accepted the loan from the said concern and failed to provide the requisite details. It is also mentioned in the assessment order that loan confirmation of M/s Nakshatra ound in the case records of original assessment proceedings completed us 143(3) of the Act. According to the AO, the appellant has failed to prove the identity, creditworthiness and genuineness of the said transaction casted upon him. Finally, addition of Rs. is made on account loans being accepted from M/s Olive Overseas Pvt Ltd, M/s Prati Gems Pvt It, M/s Nakshatra Business Pt Ltd and M/s Atharv Business Pvt 6.4 During the appellate proceedings, the Ld. AR has raised various arguments He submitted that in the statement recorded pursuant to issue of summon, the AO never asked the appellant to produce these parties for verification. Moreover, the appellant has categorically stated during the depositi availed the impugned loans through Shri HI M Tater. The documentary evidences produced before the AO clearly prove that the loans are genuine. Hence, there is no merit in the contention of the AO that the loans have been availed without any antecedents of the loaner and at a very less interest. According to the Ld. AR, for availing loan from third parties, it is not necessary to know the antecedents of the loaner. In fact, it is done by the loan givi is availing.Also, it is not necessary to give security. It depends upon the credibility of the loan availing party, which normally loan giving party ascertain from the market before advancing loan. Normally in business the loa through mediator or broker. Finally, when the loan has already been repaid, non of so many years cannot tantamount to genuine loans as non-genuine. 6.5 It is further explained by the Ld. AR that the appe availed loans from the M/s Olive Overseas Pvt Ltd, M/s Pragti Gems Pvt It, M/s Nakshatra Business Pvt Ltd and M/s Atharv Business Pvt Ltd by way of a/c payee cheque. On the said loan appellant paid interest, on the said interest the appellant deducte prove identity, creditworthiness and genuineness appellant provided necessary confirmation, copy of bank statement highlighting the loan given by the party, copy of P&L. A/c and Balance sheet and Ack of ROI filed. appellant has also provided retraction statement of Shri Pravin Kumar Jain. According to the Ld. AR, once the statement has been retracted, it has got no evidentiary value. 6.6 The Ld. AR has also explained that there is no evidence that appellant has given alleged undisclosed cash for availing the loans. Also, the AO, before coming to conclusion that the loans from Shri Pravin Kumar Jain are bogus, has ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 6.4 During the appellate proceedings, the Ld. AR has raised various arguments which are briefly summarized as under. He submitted that in the statement recorded pursuant to issue of summon, the AO never asked the appellant to produce these parties for verification. Moreover, the appellant has categorically stated during the deposition that he had availed the impugned loans through Shri HI M Tater. The documentary evidences produced before the AO clearly prove that the loans are genuine. Hence, there is no merit in the contention of the AO that the loans have been availed without any collateral security or without knowing the antecedents of the loaner and at a very less interest. According to the Ld. AR, for availing loan from third parties, it is not necessary to know the antecedents of the loaner. In fact, it is done by the loan giving party not by the party who is availing.Also, it is not necessary to give security. It depends upon the credibility of the loan availing party, which normally loan giving party ascertain from the market before advancing loan. Normally in business the loans are arranged through mediator or broker. Finally, when the loan has already been repaid, non-production of the broker after a gap of so many years cannot tantamount to genuine loans as genuine. 6.5 It is further explained by the Ld. AR that the appe availed loans from the M/s Olive Overseas Pvt Ltd, M/s Pragti Gems Pvt It, M/s Nakshatra Business Pvt Ltd and M/s Atharv Business Pvt Ltd by way of a/c payee cheque. On the said loan appellant paid interest, on the said interest the appellant deducted tax at source at the prevailing rate. To prove identity, creditworthiness and genuineness appellant provided necessary confirmation, copy of bank statement highlighting the loan given by the party, copy of P&L. A/c and Balance sheet and Ack of ROI filed. Before the AO, the appellant has also provided retraction statement of Shri Pravin Kumar Jain. According to the Ld. AR, once the statement has been retracted, it has got no evidentiary 6.6 The Ld. AR has also explained that there is no evidence t appellant has given alleged undisclosed cash for availing the loans. Also, the AO, before coming to conclusion that the loans from Shri Pravin Kumar Jain are bogus, has Shri Narendra S Shah 15 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 6.4 During the appellate proceedings, the Ld. AR has raised which are briefly summarized as under. He submitted that in the statement recorded pursuant to issue of summon, the AO never asked the appellant to produce these parties for verification. Moreover, the appellant on that he had availed the impugned loans through Shri HI M Tater. The documentary evidences produced before the AO clearly prove that the loans are genuine. Hence, there is no merit in the contention of the AO that the loans have been availed collateral security or without knowing the antecedents of the loaner and at a very less interest. According to the Ld. AR, for availing loan from third parties, it is not necessary to know the antecedents of the loaner. In ng party not by the party who is availing.Also, it is not necessary to give security. It depends upon the credibility of the loan availing party, which normally loan giving party ascertain from the market before ns are arranged through mediator or broker. Finally, when the loan has production of the broker after a gap of so many years cannot tantamount to genuine loans as 6.5 It is further explained by the Ld. AR that the appellant availed loans from the M/s Olive Overseas Pvt Ltd, M/s Pragti Gems Pvt It, M/s Nakshatra Business Pvt Ltd and M/s Atharv Business Pvt Ltd by way of a/c payee cheque. On the said loan appellant paid interest, on the said interest the d tax at source at the prevailing rate. To prove identity, creditworthiness and genuineness appellant provided necessary confirmation, copy of bank statement highlighting the loan given by the party, copy of P&L. A/c Before the AO, the appellant has also provided retraction statement of Shri Pravin Kumar Jain. According to the Ld. AR, once the statement has been retracted, it has got no evidentiary 6.6 The Ld. AR has also explained that there is no evidence t appellant has given alleged undisclosed cash for availing the loans. Also, the AO, before coming to conclusion that the loans from Shri Pravin Kumar Jain are bogus, has never provided the copy of statement recorded of Shri Pravin Kumar Jain by the Invest issued any summon to Shri Pravin Jain to verify the facts submitted by the appellant during the recording of statement pursuant to summon issued us 131, that whatever appellant submitted are true and correct or not. The AO provided any opportunity to cross examine Shri Pravin Kumar Jain which is against the principle of natural justice. Finally, the Ld.AR has relied upon the judgment of Hon'ble ITAT Mumbai in the case of ACIT vSShreedham Builders wherein the additio ShriPravin Kumar Jain was deleted by holding that when the assessee has provided all the plausible evidence proving that loans are not bogus and no evidence of having deposited cash in the accounts are found addition can made us 68 of the IT act 1961. It is claimed that since the appellant's case is squarely covered by the aforesaid decision of jurisdictional Hon'ble Mumbai ITAT, the impugned addition made needs to be deleted. Reliance has also been placed on other 6.7On careful consideration, I find merit in the above arguments of the Ld. AR.The point for adjudication is whether the AO was justified in treating the unsecured loans of Rs. 5,50,07,297/ appellant from aforesa and managed by Mr. Praveen Kumar Jain as bogus or non genuine u/s 68 of the Act adding the same to the total income of the appellant. In this connection, it is well established that the onus lies on the assessee to adduc necessary documentary evidence so as to prove all the three ingredients of section 68 viz, identity of the creditor, creditworthiness of the creditor and the genuineness of the transaction as the relevant facts are within the exclusive knowledge of the a evidences adduced by the assessee has to be examined not superficially but in depth and having regard to the test of the human probabilities and normal course of human conduct. Hon'ble ITAT, Mumbai Bench, Mumbai in t Anant Shelters Pvt. Ltd 51 SOT 234 ITAs No. 193& 232/Mum/2018(Mum) has enumerated certain legal principles regarding cash credits us 68 as under: ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 never provided the copy of statement recorded of Shri Pravin Kumar Jain by the Investigation Wing to rebut. He neither issued any summon to Shri Pravin Jain to verify the facts submitted by the appellant during the recording of statement pursuant to summon issued us 131, that whatever appellant submitted are true and correct or not. The AO provided any opportunity to cross examine Shri Pravin Kumar Jain which is against the principle of natural justice. Finally, the Ld.AR has relied upon the judgment of Hon'ble ITAT Mumbai in the case of ACIT vSShreedham Builders wherein the addition has been made on the statement of ShriPravin Kumar Jain was deleted by holding that when the assessee has provided all the plausible evidence proving that loans are not bogus and no evidence of having deposited cash in the accounts are found addition can made us 68 of the IT act 1961. It is claimed that since the appellant's case is squarely covered by the aforesaid decision of jurisdictional Hon'ble Mumbai ITAT, the impugned addition made needs to be deleted. Reliance has also been placed on other judgments. 6.7On careful consideration, I find merit in the above arguments of the Ld. AR.The point for adjudication is whether the AO was justified in treating the unsecured loans of Rs. 5,50,07,297/- shown to have been taken by the appellant from aforesaid four companies owned, controlled and managed by Mr. Praveen Kumar Jain as bogus or non genuine u/s 68 of the Act adding the same to the total income of the appellant. In this connection, it is well established that the onus lies on the assessee to adduc necessary documentary evidence so as to prove all the three ingredients of section 68 viz, identity of the creditor, creditworthiness of the creditor and the genuineness of the transaction as the relevant facts are within the exclusive knowledge of the assessee. It has also been held that the evidences adduced by the assessee has to be examined not superficially but in depth and having regard to the test of the human probabilities and normal course of human conduct. Hon'ble ITAT, Mumbai Bench, Mumbai in the case of ITO v. Anant Shelters Pvt. Ltd 51 SOT 234 ITAs No. 193& 232/Mum/2018(Mum) has enumerated certain legal principles regarding cash credits us 68 as under: Shri Narendra S Shah 16 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 never provided the copy of statement recorded of Shri Pravin igation Wing to rebut. He neither issued any summon to Shri Pravin Jain to verify the facts submitted by the appellant during the recording of statement pursuant to summon issued us 131, that whatever appellant submitted are true and correct or not. The AO has not provided any opportunity to cross examine Shri Pravin Kumar Jain which is against the principle of natural justice. Finally, the Ld.AR has relied upon the judgment of Hon'ble ITAT Mumbai in the case of ACIT vSShreedham Builders n has been made on the statement of ShriPravin Kumar Jain was deleted by holding that when the assessee has provided all the plausible evidence proving that loans are not bogus and no evidence of having deposited cash in the accounts are found addition cannot be made us 68 of the IT act 1961. It is claimed that since the appellant's case is squarely covered by the aforesaid decision of jurisdictional Hon'ble Mumbai ITAT, the impugned addition made needs to be deleted. Reliance has also been 6.7On careful consideration, I find merit in the above arguments of the Ld. AR.The point for adjudication is whether the AO was justified in treating the unsecured loans shown to have been taken by the id four companies owned, controlled and managed by Mr. Praveen Kumar Jain as bogus or non- genuine u/s 68 of the Act adding the same to the total income of the appellant. In this connection, it is well- established that the onus lies on the assessee to adduce necessary documentary evidence so as to prove all the three ingredients of section 68 viz, identity of the creditor, creditworthiness of the creditor and the genuineness of the transaction as the relevant facts are within the exclusive ssessee. It has also been held that the evidences adduced by the assessee has to be examined not superficially but in depth and having regard to the test of the human probabilities and normal course of human conduct. he case of ITO v. Anant Shelters Pvt. Ltd 51 SOT 234 ITAs No. 193& 232/Mum/2018(Mum) has enumerated certain legal 1. Section 68 can be invoked when there is a credit of sum of money in the books maintained previous year and either the assessee offers no explanation about the nature and source of such credits or the explanation furnished by the assessee in the opinion of the AO is not satisfactory. 2. The opinion of the AO for no ac offered by the assessee as not satisfactory is required to be formed objectively withreference to the material on record. 3. Courts are of the firm view that that the evidence produced by assessee cannot be brushed aside in a casual 4. The onus of proof is not static. The initial burden lies on the assessee to establish the identity and the creditworthiness of the creditor as well as the genuineness of transaction. 5. The identity of creditors can be established by either furnishing their PANs or assessment orders. The genuineness of the transaction can be proved if it was shown that the money was received by a/c payee cheque. Creditworthiness of the lender can be established by attending circumstances. 6.8 It is now to examin to discharge the onus placed on him us 68 of the Act in light of the aforesaid legal principals or propositions. necessary confirmation, copy of bank statement highlighting the loan given by the party, copy of P&L. A/c Ack of ROI filed. All the lender companies had duly filed their returns for A.Y. under consideration. A perusal of bank accounts of the lender companies clearly reveals that there were no immediate cash deposits therein prior to the issuance of cheques towards unsecured loans to the appellant. It is noticed that the unsecured loans were received vide account payee cheques through normal banking channels. It is also noticed that interest was duly paid/ credited to lender companies and deducted in accordance with law. In these circumstances, it can by no means be said that the appellant had not discharged the initial onus cast upon him to establish the ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 1. Section 68 can be invoked when there is a credit of sum of money in the books maintained by the assessee during the previous year and either the assessee offers no explanation about the nature and source of such credits or the explanation furnished by the assessee in the opinion of the AO is not satisfactory. 2. The opinion of the AO for no accepting the explanation offered by the assessee as not satisfactory is required to be formed objectively withreference to the material on record. 3. Courts are of the firm view that that the evidence produced by assessee cannot be brushed aside in a casual 4. The onus of proof is not static. The initial burden lies on the assessee to establish the identity and the creditworthiness of the creditor as well as the genuineness of 5. The identity of creditors can be established by either nishing their PANs or assessment orders. The genuineness of the transaction can be proved if it was shown that the money was received by a/c payee cheque. Creditworthiness of the lender can be established by attending circumstances. 6.8 It is now to examine whether the appellant has been able to discharge the onus placed on him us 68 of the Act in light of the aforesaid legal principals or propositions. necessary confirmation, copy of bank statement highlighting the loan given by the party, copy of P&L. A/c and Balance sheet and Ack of ROI filed. All the lender companies had duly filed their returns for A.Y. under consideration. A perusal of bank accounts of the lender companies clearly reveals that there were no immediate cash deposits therein prior to the issuance of cheques towards unsecured loans to the appellant. It is noticed that the unsecured loans were received vide account payee cheques through normal banking channels. It is also noticed that interest was duly paid/ credited to lender companies and tax thereon was deducted in accordance with law. In these circumstances, it can by no means be said that the appellant had not discharged the initial onus cast upon him to establish the Shri Narendra S Shah 17 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 1. Section 68 can be invoked when there is a credit of sum of by the assessee during the previous year and either the assessee offers no explanation about the nature and source of such credits or the explanation furnished by the assessee in the opinion of the cepting the explanation offered by the assessee as not satisfactory is required to be formed objectively withreference to the material on record. 3. Courts are of the firm view that that the evidence produced manner. 4. The onus of proof is not static. The initial burden lies on the assessee to establish the identity and the creditworthiness of the creditor as well as the genuineness of 5. The identity of creditors can be established by either nishing their PANs or assessment orders. The genuineness of the transaction can be proved if it was shown that the money was received by a/c payee cheque. Creditworthiness of the lender can be established by e whether the appellant has been able to discharge the onus placed on him us 68 of the Act in light of the aforesaid legal principals or propositions. necessary confirmation, copy of bank statement highlighting the loan and Balance sheet and Ack of ROI filed. All the lender companies had duly filed their returns for A.Y. under consideration. A perusal of bank accounts of the lender companies clearly reveals that there were no immediate cash deposits therein prior to the issuance of cheques towards unsecured loans to the appellant. It is noticed that the unsecured loans were received vide account payee cheques through normal banking channels. It is also noticed that interest was duly tax thereon was deducted in accordance with law. In these circumstances, it can by no means be said that the appellant had not discharged the initial onus cast upon him to establish the identity and creditworthiness of the creditors as well as genuineness to the AO. If the A0 was not satisfied, she had the option of making inquiries from the lenders by summoning them. However, it is noticed that no independent verification was carried out by the AO with the l summons us 131 was issued to the lender companies. In the statement recorded of the appellant, it is categorically claimed that loans were indeed taken. No evidence was brought on record by the AO to controvert the claims of the appellant. There is no finding by the AO that the evidences produced by the appellant were untrustworthy or lacked credibility. In other words, the AO has not discharged his burden of proof to rebut the evidences produced by the appellant or to bring any contrary is found that the appellant had discharged onus of establishing the identity and creditworthiness of the lender companies and genuineness of the transactions with the help of relevant supporting evidences which could not be disproved by the AO. 13. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that the assessee has filed all the details in respect of the parties including their profit and loss account acknowledgement of return of income filed but no inquiry of any was carried out by the Assessing Officer 133(6) or u/s 131 of the Act. Further, the Ld. CIT(A) has relied on the decision of the Tribunal in the Pvt. Ltd. 51 SOT 234 193/Mum/2018and230/Mum/2018 for assessment year 2010 11 and 2012-13, wherein from those four parries have been deleted. The relevant finding of the Ld. CIT(A) is reproduced as under: ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 identity and creditworthiness of the creditors as well as genuineness of the transactions. Therefore, the onus shifted to the AO. If the A0 was not satisfied, she had the option of making inquiries from the lenders by summoning them. However, it is noticed that no independent verification was carried out by the AO with the lender companies. No summons us 131 was issued to the lender companies. In the statement recorded of the appellant, it is categorically claimed that loans were indeed taken. No evidence was brought on record by the AO to controvert the claims of the nt. There is no finding by the AO that the evidences produced by the appellant were untrustworthy or lacked credibility. In other words, the AO has not discharged his burden of proof to rebut the evidences produced by the appellant or to bring any contrary material on record. Thus, it is found that the appellant had discharged onus of establishing the identity and creditworthiness of the lender companies and genuineness of the transactions with the help of relevant supporting evidences which could not be sproved by the AO.” We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that the assessee has filed all the details in respect of the parties including their profit and loss account, balance sheet and acknowledgement of return of income filed but no inquiry of any carried out by the Assessing Officer either by way of notice u/s 133(6) or u/s 131 of the Act. Further, the Ld. CIT(A) has relied on the decision of the Tribunal in the case of ITO v. Anant Shelters Pvt. Ltd. 51 SOT 234 193/Mum/2018and230/Mum/2018 for assessment year 2010 wherein identical circumstances loans received se four parries have been deleted. The relevant finding of ) is reproduced as under: Shri Narendra S Shah 18 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 identity and creditworthiness of the creditors as well as of the transactions. Therefore, the onus shifted to the AO. If the A0 was not satisfied, she had the option of making inquiries from the lenders by summoning them. However, it is noticed that no independent verification was ender companies. No summons us 131 was issued to the lender companies. In the statement recorded of the appellant, it is categorically claimed that loans were indeed taken. No evidence was brought on record by the AO to controvert the claims of the nt. There is no finding by the AO that the evidences produced by the appellant were untrustworthy or lacked credibility. In other words, the AO has not discharged his burden of proof to rebut the evidences produced by the material on record. Thus, it is found that the appellant had discharged onus of establishing the identity and creditworthiness of the lender companies and genuineness of the transactions with the help of relevant supporting evidences which could not be We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that the assessee has filed all the details in respect of the parties , balance sheet and acknowledgement of return of income filed but no inquiry of any by way of notice u/s 133(6) or u/s 131 of the Act. Further, the Ld. CIT(A) has relied on ITO v. Anant Shelters Pvt. Ltd. 51 SOT 234 ITA No. 193/Mum/2018and230/Mum/2018 for assessment year 2010- identical circumstances loans received se four parries have been deleted. The relevant finding of “6.9 Apart from the above, I find that Hon'ble Mumbai Tribunal in the case of ACIT vSAbaniSarbeswar Das (ITA No. 193/Mum/2018 and 232/Mum/2018) AYs. 2010 2012-13 vide order dated 15.05.2019, has examined identical issue of by Shri Praveen Km. Jain on the basis of Investigation Wing report and Statement of Shri Praveen Km. Jain. It is also observed that one of the concerns M/s Olive Overseas Pvt. Ltd. Is common lender. The Hon'ble Tri Department has held as under 11. We find that undisputedly the assessee has borrowed money by way of loan from three aforesaid four parties i.e. Tanika Commodities P. Ltd, Ansh Merchandise P. Ltd., Duke Business P. assessee borrowed the money and total outstanding including the interest as on 31.3.2010 were amounting to 91,33,644/-. The case of the assessee was re receiving the information from DGIT(Inv), assessee was one of the accommodation entries provided by Praveen Kumar 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 of the creditors and the assessee, form no.16 qua TDS on interest, profit and loss account and balance sheet including the ledger account of the creditors, and ITR etc. Moreover, the loan before the AO in compliance to the notice issued under section 133(6) before the AO that loans were actually given to the assessee. From all 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 ingre 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 have been established by the assessee. So much so that the ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 6.9 Apart from the above, I find that Hon'ble Mumbai Tribunal in the case of ACIT vSAbaniSarbeswar Das (ITA No. 193/Mum/2018 and 232/Mum/2018) AYs. 2010 13 vide order dated 15.05.2019, has examined identical issue of receiving loans from companies controlled by Shri Praveen Km. Jain on the basis of Investigation Wing report and Statement of Shri Praveen Km. Jain. It is also observed that one of the concerns M/s Olive Overseas Pvt. Ltd. Is common lender. The Hon'ble Tribunal while dismissing the appeal of the Department has held as under- 11. We find that undisputedly the assessee has borrowed money by way of loan from three aforesaid four parties i.e. Tanika Commodities P. Ltd, Ansh Merchandise P. Ltd., Duke Ltd and Olive overseas Pvt. Ltd. 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 information from DGIT(Inv), Mumbai that the assessee was one of the beneficiary of the said accommodation entries provided by Praveen Kumar Jain and group. We find from the record that the assessee filed during the course of assessment proceedings all the details like loan on letters from the creditors, PAN of the creditors, bank statements of the creditors and the assessee, form no.16 qua TDS on interest, profit 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 section 133(6) 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 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 Shri Narendra S Shah 19 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 6.9 Apart from the above, I find that Hon'ble Mumbai Tribunal in the case of ACIT vSAbaniSarbeswar Das (ITA No. 193/Mum/2018 and 232/Mum/2018) AYs. 2010-11 and 13 vide order dated 15.05.2019, has examined receiving loans from companies controlled by Shri Praveen Km. Jain on the basis of Investigation Wing report and Statement of Shri Praveen Km. Jain. It is also observed that one of the concerns M/s Olive Overseas Pvt. bunal while dismissing the appeal of the 11. We find that undisputedly the assessee has borrowed money by way of loan from three aforesaid four parties i.e. Tanika Commodities P. Ltd, Ansh Merchandise P. Ltd., Duke Ltd and Olive overseas Pvt. Ltd. from whom the assessee borrowed the money and total outstanding including the interest as on 31.3.2010 were amounting to ₹ opened upon Mumbai that the beneficiary of the said accommodation entries provided by Praveen Kumar Jain and group. We find from the record that the assessee filed during the course of assessment proceedings all the details like loan on letters from the creditors, PAN of the creditors, bank statements of the creditors and the assessee, form no.16 qua TDS on interest, profit and loss account and balance sheet including the ledger account of the creditors, 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. se 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 dients 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 creditors have been established by the assessee. So much so that the loan creditors in response to the notice issued under 133(6) of the Act appeared before the AO and confirmed 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 AO. Once the assessee has filed all the necessary documents before the AO then the onus is shifted 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 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 a of natural justice. 12. In view of the above facts and circumstances, we are of the view that the CIT(A) has rightly deleted the addition and we confirm the same. 6.10 Hon'ble Mumbai ITAT in the case of ACIT vs Shreedh BuildersITANO.5589/Mum/2017 AY 2012 22.06.2018 had the occasion of examine the identical issue where lenders are the same i.e., M/s Olive Overseas Pvt.Ltd., M/s Nakshatra Business Pvt. Ltd. and M/s Atharv Business Pvt. Ltd. The finds o The Ld. Assessing Officer treated Rs.4.70 crores, introduced by the assessee in its books as unsecured loans/unexplained credit and added under the Act and some unexplained expenditure under 69C of the Act and also disallowed interest of Rs.5,73,193/ , paid on unsecured loan and disallowed the same under section 37 of the survey, the assessee vide letter dated 28/10/2014 requested for copy of statement. As per the assessee, the Assessing Officer did not provide the copy. As per the assessee, the cross ex not provided. The assessee filed loan confirmation, acknowledgments of ITRs, relevant bank statement of lenders, proof of re ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 loan creditors in response to the notice issued under of the Act appeared before the AO and confirmed that ave 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 AO. Once the assessee has filed all 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 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. 12. In view of the above facts and circumstances, we are of the view that the CIT(A) has rightly deleted the addition and we confirm the same. 6.10 Hon'ble Mumbai ITAT in the case of ACIT vs Shreedh BuildersITANO.5589/Mum/2017 AY 2012-13 date of Order 22.06.2018 had the occasion of examine the identical issue where lenders are the same i.e., M/s Olive Overseas Pvt.Ltd., M/s Nakshatra Business Pvt. Ltd. and M/s Atharv Business Pvt. Ltd. The finds of the Hon'ble Tribunal are as under The Ld. Assessing Officer treated Rs.4.70 crores, introduced by the assessee in its books as unsecured loans/unexplained credit and added under section 68 d some unexplained expenditure under of the Act and also disallowed interest of Rs.5,73,193/ , paid on unsecured loan and disallowed the same section 37 of the Act. It is noted that at the conclusion of the survey, the assessee vide letter dated 28/10/2014 requested for copy of statement. As per the assessee, the Assessing Officer did not provide the copy. As per the assessee, the cross examination of Shri Pravin Jain was also not provided. The assessee filed loan confirmation, acknowledgments of ITRs, relevant bank statement of lenders, proof of re-payment of such loans and on the Shri Narendra S Shah 20 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 loan creditors in response to the notice issued under section of the Act appeared before the AO and confirmed that ave 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 AO. Once the assessee has filed all the necessary documents before the 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 accommodation entries without bringing any material against the assessee on record by contrary to the defense put up by the during the course of appellant proceedings. No cross examination was allowed to the assessee and gainst the assessee causing violation 12. In view of the above facts and circumstances, we are of the view that the CIT(A) has rightly deleted the addition and 6.10 Hon'ble Mumbai ITAT in the case of ACIT vs Shreedham 13 date of Order- 22.06.2018 had the occasion of examine the identical issue where lenders are the same i.e., M/s Olive Overseas Pvt.Ltd., M/s Nakshatra Business Pvt. Ltd. and M/s Atharv Business f the Hon'ble Tribunal are as under- The Ld. Assessing Officer treated Rs.4.70 crores, introduced by the assessee in its books as unsecured section 68 of d some unexplained expenditure under section of the Act and also disallowed interest of Rs.5,73,193/- , paid on unsecured loan and disallowed the same of the Act. It is noted that at the conclusion of the survey, the assessee vide letter dated 28/10/2014 requested for copy of statement. As per the assessee, the Assessing Officer did not provide the copy. As per the amination of Shri Pravin Jain was also not provided. The assessee filed loan confirmation, acknowledgments of ITRs, relevant bank statement of payment of such loans and on the summons issued to all the creditors and the brokers all of them furnished requisite details. It is noted that the financial statements and other loan creditors were never disclosed by the Ld. Assessing Officer and by implication accepted that the assessee in fact received loans. This has been observed even by the 10(para-4.13 of the impugned order). It is further noted that on 21/10/2014, the assessee requested the Assessing Officer to provide the copy of statement recorded during survey, evidence of filing retraction on 11/11/2014 of filing of loan confirmations, acknowledgment of ITRs and bank statement of parties vide letter dated 28/12/2014, copy of its submission on unsecured loans dated 16/02/2015, retraction affidavit of Shri Pravin Kumar Jain, dated 15/05/2014, rep and its submissions dated 16/02/2015, wherein, present address, details of directors and shareholding patterns of lenders companies were filed by the assessee before the Ld. Assessing Officer. It is noted that before the F Authority, the assessee challenged the validity of assessment by raising an additional ground as the assessee was not allowed opportunity to cross examine Shri Pravin Kumar Jain and which was not con Income Tax (Appeal) vide letter dated 05/07/2016 asked the Ld. Assessing Officer to handover the statements pertaining to Shri Pravin Kumar Jain or its staff members or dummy directors to allow the assessee an opportu examine Shri Pravin Kumar Jain. The Ld. Assessing Officer was also asked to provide the evidences found during the course of survey action or any evidence that payment was made for obtaining unsecured loans and also efforts so made to examine asked to conduct necessary enquiries with respect to genuineness of the unsecured loans. The Ld. Assessing Officer vide letter dated 07/01/2017, submitted the remand report as has been reproduced at page impugned order. It has been mentioned in para 6.3 of the impugned order that Shri Pravin Jain produced the ledger accounts of Shreedham Builders in the books of his companies alongwith bank statement reflecting all the ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 summons issued to all the creditors and the brokers all of them furnished requisite details. It is noted that the statements and other loan creditors were never disclosed by the Ld. Assessing Officer and by implication accepted that the assessee in fact received loans. This has been observed even by the First Appellate Authority at page 4.13 of the impugned order). It is further noted that on 21/10/2014, the assessee requested the Assessing Officer to provide the copy of statement recorded during survey, evidence of filing retraction on 11/11/2014 of filing of loan confirmations, acknowledgment of ITRs and bank statement of parties vide letter dated 28/12/2014, copy of its submission on unsecured loans dated 16/02/2015, retraction affidavit of Shri Pravin Kumar Jain, dated 15/05/2014, repayment details of unsecured loans and its submissions dated 16/02/2015, wherein, present address, details of directors and shareholding patterns of lenders companies were filed by the assessee before the Ld. Assessing Officer. It is noted that before the First Appellate Authority, the assessee challenged the validity of assessment by raising an additional ground as the assessee was not allowed opportunity to cross examine Shri Pravin Kumar Jain and other material used against the assessee, which was not confronted to it. The Ld. Commissioner of Income Tax (Appeal) vide letter dated 05/07/2016 asked the Assessing Officer to handover the statements pertaining to Shri Pravin Kumar Jain or its staff members or dummy directors to allow the assessee an opportunity to cross examine Shri Pravin Kumar Jain. The Ld. Assessing Officer was also asked to provide the evidences found during the course of survey action or any evidence that payment was made for obtaining unsecured loans and also efforts so made the loan creditors. The Assessing Officer was asked to conduct necessary enquiries with respect to genuineness of the unsecured loans. The Ld. Assessing Officer vide letter dated 07/01/2017, submitted the remand report as has been reproduced at page-10 onwards of the impugned order. It has been mentioned in para 6.3 of the impugned order that Shri Pravin Jain produced the ledger accounts of Shreedham Builders in the books of his companies alongwith bank statement reflecting all the Shri Narendra S Shah 21 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 summons issued to all the creditors and the brokers all of them furnished requisite details. It is noted that the statements and other loan creditors were never disclosed by the Ld. Assessing Officer and by implication accepted that the assessee in fact received loans. This has First Appellate Authority at page- 4.13 of the impugned order). It is further noted that on 21/10/2014, the assessee requested the Assessing Officer to provide the copy of statement recorded during survey, evidence of filing retraction on 11/11/2014, evidence of filing of loan confirmations, acknowledgment of ITRs and bank statement of parties vide letter dated 28/12/2014, copy of its submission on unsecured loans dated 16/02/2015, retraction affidavit of Shri Pravin Kumar Jain, ayment details of unsecured loans and its submissions dated 16/02/2015, wherein, present address, details of directors and shareholding patterns of lenders companies were filed by the assessee before the Ld. irst Appellate Authority, the assessee challenged the validity of assessment by raising an additional ground as the assessee was not allowed opportunity to cross examine Shri Pravin other material used against the assessee, fronted to it. The Ld. Commissioner of Income Tax (Appeal) vide letter dated 05/07/2016 asked the Assessing Officer to handover the statements pertaining to Shri Pravin Kumar Jain or its staff members or dummy nity to cross examine Shri Pravin Kumar Jain. The Ld. Assessing Officer was also asked to provide the evidences found during the course of survey action or any evidence that payment was made for obtaining unsecured loans and also efforts so made the loan creditors. The Assessing Officer was asked to conduct necessary enquiries with respect to genuineness of the unsecured loans. The Ld. Assessing Officer vide letter dated 07/01/2017, submitted the remand wards of the impugned order. It has been mentioned in para 6.3 of the impugned order that Shri Pravin Jain produced the ledger accounts of Shreedham Builders in the books of his companies alongwith bank statement reflecting all the transactions and also au year Shreedham Builders ITA No.5589/Mum/2017 along with the copy of the retraction of statement filed before CBDT. Nothing objectionable was found in the documents or statements. All the loan creditors were summoned and the statements of the directors were recorded, wherein, they have accepted of giving loan to the assessee. The Ledger copies of those companies reflecting loans given to the assessee were also produced. The Ld. Assessing Officer also provided the copy of stat Kumar Jain under In para 6.6 of the impugned order, there is an observation that the nature and source of business/amount was explained and the details of loan were also confirmed. All corroborative details were duly filed. From the record, we also note that the assessee also filed acknowledgment of filing of IT returns together with computation of total income (pages 1 & 2 of the paper b along with tax audit report for the year ending 31/03/2012 (pages 3 to 31 of the paper book), retraction of statement by Shri Ajay Maheshwari, partner, dated 10/11/2014 for the statement on oath recorded on 17/ & 18th October, (pages 32 to 37 of the paper book), remand report of the Assessing Officer dated 17/12/2016 filed before the Ld. Commissioner of Income Tax (Appeal) (pages 38 to 56 of the paper book), remand report of the Asse the CIT(A) (pages 57 of the paper book), acknowledgment evidencing for filing of return for Assessment Year 2012 audited annual account for the year ending 31/03/2012, ledger confirmation, ledger account of the assessee books of the lender and bank statement of the lender (in the case of Athrav Business Pvt. Ltd. (page 58 to 72 of the paper book). Identically similar documents as a proof of evidence were filed from Casper Enterprises Ltd. (pages 71 to 83 of the paper book), Duke Business Pvt. Ltd. (J.P. K. Trading I. Pvt.Ltd.) (pages 84 to 96 of the paper book), Olive Overseas Pvt.Ltd. (pages 97 to 110 of the paper book), Viraj Mercantile Pvt.Ltd. (pages 111 to 119 of the paper book) and Nakshatra Business Pvt. Ltd. these documents neither disproved by the Ld. Assessing Officer nor any evidence was brought on record to falsify the claim of the assessee or the authenticity of these documents. ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 transactions and also audited balance sheet of last four Shreedham Builders ITA No.5589/Mum/2017 along with the copy of the retraction of statement filed before CBDT. Nothing objectionable was found in the documents or statements. All the loan creditors were summoned and the statements of the directors were recorded, wherein, they have accepted of giving loan to the assessee. The Ledger copies of those companies reflecting loans given to the assessee were also produced. The Ld. Assessing Officer also provided the copy of statement recorded from Shri Pravin Kumar Jain under section 131 of the Act on 21/11/2006. In para 6.6 of the impugned order, there is an observation that the nature and source of business/amount was and the details of loan were also confirmed. All corroborative details were duly filed. From the record, we also note that the assessee also filed acknowledgment of filing of IT returns together with computation of total income (pages 1 & 2 of the paper book), audited annual accounts along with tax audit report for the year ending 31/03/2012 (pages 3 to 31 of the paper book), retraction of statement by Shri Ajay Maheshwari, partner, dated 10/11/2014 for the statement on oath recorded on 17/ & 18th October, (pages 32 to Shreedham Builders ITA No.5589/Mum/2017 37 of the paper book), remand report of the Assessing Officer dated 17/12/2016 filed before the Ld. Commissioner of Income Tax (Appeal) (pages 38 to 56 of the paper book), remand report of the Assessing Officer 04/01/2017 before the CIT(A) (pages 57 of the paper book), acknowledgment evidencing for filing of return for Assessment Year 2012 audited annual account for the year ending 31/03/2012, ledger confirmation, ledger account of the assessee books of the lender and bank statement of the lender (in the case of Athrav Business Pvt. Ltd. (page 58 to 72 of the paper book). Identically similar documents as a proof of evidence were filed from Casper Enterprises Ltd. (pages 71 to 83 of er book), Duke Business Pvt. Ltd. (J.P. K. Trading I. Pvt.Ltd.) (pages 84 to 96 of the paper book), Olive Overseas Pvt.Ltd. (pages 97 to 110 of the paper book), Viraj Mercantile Pvt.Ltd. (pages 111 to 119 of the paper book) and Nakshatra Business Pvt. Ltd. (Pages 120 to 131 of the paper book). All these documents neither disproved by the Ld. Assessing Officer nor any evidence was brought on record to falsify the claim of the assessee or the authenticity of these documents. Shri Narendra S Shah 22 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 dited balance sheet of last four Shreedham Builders ITA No.5589/Mum/2017 along with the copy of the retraction of statement filed before CBDT. Nothing objectionable was found in the documents or statements. All the loan creditors were summoned and the statements of the directors were recorded, wherein, they have accepted of giving loan to the assessee. The Ledger copies of those companies reflecting loans given to the assessee were also produced. The Ld. Assessing Officer also ement recorded from Shri Pravin of the Act on 21/11/2006. In para 6.6 of the impugned order, there is an observation that the nature and source of business/amount was and the details of loan were also confirmed. All corroborative details were duly filed. From the record, we also note that the assessee also filed acknowledgment of filing of IT returns together with computation of total income ook), audited annual accounts along with tax audit report for the year ending 31/03/2012 (pages 3 to 31 of the paper book), retraction of statement by Shri Ajay Maheshwari, partner, dated 10/11/2014 for the statement on oath recorded on 17/ & 18th October, 2014 Shreedham Builders ITA No.5589/Mum/2017 37 of the paper book), remand report of the Assessing Officer dated 17/12/2016 filed before the Ld. Commissioner of Income Tax (Appeal) (pages 38 to 56 of the paper book), ssing Officer 04/01/2017 before the CIT(A) (pages 57 of the paper book), acknowledgment evidencing for filing of return for Assessment Year 2012-13, audited annual account for the year ending 31/03/2012, ledger confirmation, ledger account of the assessee in the books of the lender and bank statement of the lender (in the case of Athrav Business Pvt. Ltd. (page 58 to 72 of the paper book). Identically similar documents as a proof of evidence were filed from Casper Enterprises Ltd. (pages 71 to 83 of er book), Duke Business Pvt. Ltd. (J.P. K. Trading I. Pvt.Ltd.) (pages 84 to 96 of the paper book), Olive Overseas Pvt.Ltd. (pages 97 to 110 of the paper book), Viraj Mercantile Pvt.Ltd. (pages 111 to 119 of the paper book) and Nakshatra (Pages 120 to 131 of the paper book). All these documents neither disproved by the Ld. Assessing Officer nor any evidence was brought on record to falsify the claim of the assessee or the authenticity of these documents. Thus, it can be said that the asse provided under through banking channel by the assessee on such loans. It is also noted that so far as the disallowance of interest p is concerned, the same was deleted by the ld. FAA and has not been challenged before this Tribunal by the Revenue further fortifies the case of the assessee. The loans were repaid along with interest before the date of survey i.e. 17/10/2014 and no fortifies the claim of the assessee. All the concerned parties appeared before the Ld. Assessing Officer during remand proceedings, the Ld. Assessing Officer recorded their statement and nothing adverse was pointed out Pravin Jain himself appeared before the Ld. Assessing Officer and even during remand proceedings enquiries were carried out and no adverse remark was made by the ld. Assessing Officer. The assessee as well as the other parties furnished all possi are not bogus.No cash was found deposited in the accounts of alleged six parties, thus, keeping in view, the totality of facts, attendant the presence of plausible explanati relevant material, and requirement of fulfillment of ingredients, enshrined in onus cast upon the assessee has been duly discharged, therefore, the a purely based upon presumption or the statement recorded and later on retracted by the concerned parties, therefore, we find infirmity in the conclusion of the Ld. Commissioner of Income Tax (Appeal), resultantly, th is dismissed.Finally, the appeal of the Revenue is dismissed.” 13.1 Since the Ld. CIT(A) has followed Tribunal on the issue in dispute and judicial forum contrary to the decisio by the ld CIT(DR), therefore we do not find any error in the order of the Ld. CIT(A) on the issue in dispute. Accordingly, we uph ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 Thus, it can be said that the assessee discharged its onus as provided under section 68 of the Act. The interest was paid through banking channel by the assessee on such loans. It is also noted that so far as the disallowance of interest p is concerned, the same was deleted by the ld. FAA and has not been challenged before this Tribunal by the Revenue further fortifies the case of the assessee. The loans were repaid along with interest before the date of survey i.e. 17/10/2014 and no cash was found during survey further fortifies the claim of the assessee. All the concerned parties appeared before the Ld. Assessing Officer during remand proceedings, the Ld. Assessing Officer recorded their statement and nothing adverse was pointed out Pravin Jain himself appeared before the Ld. Assessing Officer and even during remand proceedings enquiries were carried out and no adverse remark was made by the ld. Assessing Officer. The assessee as well as the other parties furnished all possible documents evidencing that the loans are not bogus.No cash was found deposited in the accounts of alleged six parties, thus, keeping in view, the totality of facts, attendant circumstances, human probabilities, and in the presence of plausible explanation by the assessee, relevant material, and requirement of fulfillment of ingredients, enshrined in section 68 of the Act, we find that onus cast upon the assessee has been duly discharged, therefore, the addition made u/s 68 of the Act, which is purely based upon presumption or the statement recorded and later on retracted by the concerned parties, therefore, we find infirmity in the conclusion of the Ld. Commissioner of Income Tax (Appeal), resultantly, the appeal of the Revenue is dismissed.Finally, the appeal of the Revenue is Since the Ld. CIT(A) has followed a binding precedent of the Tribunal on the issue in dispute and no other decision of higher judicial forum contrary to the decision has been brought on record therefore we do not find any error in the order of the Ld. CIT(A) on the issue in dispute. Accordingly, we uph Shri Narendra S Shah 23 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 ssee discharged its onus as of the Act. The interest was paid through banking channel by the assessee on such loans. It is also noted that so far as the disallowance of interest portion is concerned, the same was deleted by the ld. FAA and has not been challenged before this Tribunal by the Revenue further fortifies the case of the assessee. The loans were repaid along with interest before the date of survey i.e. cash was found during survey further fortifies the claim of the assessee. All the concerned parties appeared before the Ld. Assessing Officer during remand proceedings, the Ld. Assessing Officer recorded their statement and nothing adverse was pointed out even Shri Pravin Jain himself appeared before the Ld. Assessing Officer and even during remand proceedings enquiries were carried out and no adverse remark was made by the ld. Assessing Officer. The assessee as well as the other parties ble documents evidencing that the loans are not bogus.No cash was found deposited in the accounts of alleged six parties, thus, keeping in view, the totality of circumstances, human probabilities, and in on by the assessee, relevant material, and requirement of fulfillment of of the Act, we find that onus cast upon the assessee has been duly discharged, ddition made u/s 68 of the Act, which is purely based upon presumption or the statement recorded and later on retracted by the concerned parties, therefore, we find infirmity in the conclusion of the Ld. Commissioner of e appeal of the Revenue is dismissed.Finally, the appeal of the Revenue is binding precedent of the no other decision of higher n has been brought on record therefore we do not find any error in the order of the Ld. CIT(A) on the issue in dispute. Accordingly, we uphold the same. The ground No. 1 of the appeal of the Revenue is accordingly dismissed. 14. In the ground No. of the short-term capital gain of Rs.25,54,440/ the issue in dispute are that the assessee is in the business of buying and selling of the land year,the assessee purchased property worth Rs.55,86,560/ was sold on 14.12.2012 for consideration of Rs.1,61,41,400/ the profit earned thereon of Rs.25,54,400/ assessee as business income. The assessee shown said purchase and sale in profit and loss account however, the Assessing Officer disregarded the business capital gain. It is the contention of the assessee that asses regularly engaged in sale properties in earlier as well as subsequent years. The Ld. Assessing Officer, however rejected the contention of the assessee and addition of Rs.25,54,440/ CIT(A) however, deleted the addition observing as “7.2 Appellate Decision: I have carefully considered the facts of the case, submissions of the Appellant, the observations of the AO contained in the assessment order and the other materials on record on this issue. In this ground the appellant has has observed as under: "The assessee has been asked various times to provide the details of sale agreement and the working of capital gain, ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 he ground No. 1 of the appeal of the Revenue is accordingly ground No. 2, the Revenue has challenged the deletion capital gain of Rs.25,54,440/-. The brief facts qua the issue in dispute are that the assessee is in the business of buying and selling of the land,real estate properties etc. purchased property worth Rs.55,86,560/ was sold on 14.12.2012 for consideration of Rs.1,61,41,400/ the profit earned thereon of Rs.25,54,400/- was offered by the business income. The assessee shown said purchase and sale in profit and loss account however, the Assessing Officer disregarded the business income and treated as same as short term t is the contention of the assessee that asses regularly engaged in sale and purchase of land and im earlier as well as subsequent years. The Ld. Assessing Officer, however rejected the contention of the assessee and addition of Rs.25,54,440/- as short-term capital gain. The Ld. CIT(A) however, deleted the addition observing as under: 7.2 Appellate Decision: I have carefully considered the facts of the case, submissions of the Appellant, the observations of the AO contained in the assessment order and the other materials on record on this issue. In this ground the appellant has contended that the AO. In this respect the AO has observed as under: "The assessee has been asked various times to provide the details of sale agreement and the working of capital gain, Shri Narendra S Shah 24 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 he ground No. 1 of the appeal of the Revenue is accordingly Revenue has challenged the deletion . The brief facts qua the issue in dispute are that the assessee is in the business of properties etc. During the purchased property worth Rs.55,86,560/- which was sold on 14.12.2012 for consideration of Rs.1,61,41,400/- and was offered by the business income. The assessee shown said purchase and sale in profit and loss account however, the Assessing Officer and treated as same as short term t is the contention of the assessee that assessee was of land and immovable earlier as well as subsequent years. The Ld. Assessing Officer, however rejected the contention of the assessee and made capital gain. The Ld. under: 7.2 Appellate Decision: I have carefully considered the facts of the case, submissions of the Appellant, the observations of the AO contained in the assessment order and the other materials on record on this issue. In this ground the contended that the AO. In this respect the AO "The assessee has been asked various times to provide the details of sale agreement and the working of capital gain, but, no details have been furnished. Accordingly, a show cause notice asking him to show cause as to why an amount of Rs.25,54,440/ 'capital gains'. In response to the above, the assessee in the submissions filed in this office on 08 other than the reasons recorded for reopening of assessment could be seen by the AO. This contention of the assessee is not acceptable at all in view of the Explanation 3 to the provisions of section 147 of the IT Act, 19 "Explanation 3 reassessment under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the cou section, notwithstanding that the reasons for such issue have not been included in the reasons recorded under sub section (2) of section 148". 13.1 It is clear from the above explanation that the Assessing Officer is empow the course of the proceedings under this section, notwithstanding that the reasons for such issue have not been included in the reasons recorded under section 148. There is no bar on the Assessing Officer to issues noticed in connection with the reassessment proceedings. Thus, the objection raised by the assessee is hereby rejected. 13.2 Coming to the merits of the case, the assessee in his submissions has contended that he has purchased and sold the property immediately and his intention was not to make an investment and hence by no imagination the profit can be treated as capital gain. This contention of the assessee is also not acceptable. As per the section 45 of the Act, any profit or gains ari affected in the previous year shall be chargeable to income tax under the head "Capital Gains" and shall be deemed to be income of the previous year in which the transfer took ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 but, no details have been furnished. Accordingly, a show cause notice has been issued to the assessee on 30 asking him to show cause as to why an amount of Rs.25,54,440/-should not be brought to tax under the head 'capital gains'. In response to the above, the assessee in the submissions filed in this office on 08-12-2017 has contended that no issue other than the reasons recorded for reopening of assessment could be seen by the AO. This contention of the assessee is not acceptable at all in view of the Explanation 3 to the provisions of section 147 of the IT Act, 1961: "Explanation 3 - For the purpose of assessment or reassessment under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, notwithstanding that the reasons for such issue have not been included in the reasons recorded under sub section (2) of section 148". 13.1 It is clear from the above explanation that the Assessing Officer is empowered to verify the issue comes to his notice in the course of the proceedings under this section, notwithstanding that the reasons for such issue have not been included in the reasons recorded under section 148. There is no bar on the Assessing Officer to examine the issues noticed in connection with the reassessment proceedings. Thus, the objection raised by the assessee is hereby rejected. 13.2 Coming to the merits of the case, the assessee in his submissions has contended that he has purchased and sold he property immediately and his intention was not to make an investment and hence by no imagination the profit can be treated as capital gain. This contention of the assessee is also not acceptable. As per the section 45 of the Act, any profit or gains arising from the transfer of a capital asset affected in the previous year shall be chargeable to income tax under the head "Capital Gains" and shall be deemed to be income of the previous year in which the transfer took Shri Narendra S Shah 25 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 but, no details have been furnished. Accordingly, a show has been issued to the assessee on 30-11-2017, asking him to show cause as to why an amount of should not be brought to tax under the head In response to the above, the assessee in the submissions 2017 has contended that no issue other than the reasons recorded for reopening of assessment could be seen by the AO. This contention of the assessee is not acceptable at all in view of the Explanation 3 to the For the purpose of assessment or reassessment under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice rse of the proceedings under this section, notwithstanding that the reasons for such issue have not been included in the reasons recorded under sub- 13.1 It is clear from the above explanation that the Assessing ered to verify the issue comes to his notice in the course of the proceedings under this section, notwithstanding that the reasons for such issue have not been included in the reasons recorded under section 148. examine the issues noticed in connection with the reassessment proceedings. Thus, the objection raised by the assessee is 13.2 Coming to the merits of the case, the assessee in his submissions has contended that he has purchased and sold he property immediately and his intention was not to make an investment and hence by no imagination the profit can be treated as capital gain. This contention of the assessee is also not acceptable. As per the section 45 of the Act, any sing from the transfer of a capital asset affected in the previous year shall be chargeable to income tax under the head "Capital Gains" and shall be deemed to be income of the previous year in which the transfer took place. Given the fact that the assesse evidences in the form of purchase agreement and sale agreement." 7.3 From the assessment order it appears that the AO has formed his view only on the basis of section 45 of the IT Act, wherein the provision says that any profit or ga from the transfer of a capital asset affected in the previous year shall be chargeable to income tax under the head "Capital Gains" According to the AO, since the appellant did not produce evidences in the form of purchase agreement and sale ag was made. I find the above observation of the AO lacks in merit. It appears that the AO has completely ignored the accounts of the appellant where such transactions (sale and purchase) in land, flats etc. are from the same is offered through the profit and loss account in the preceding and seceding years.Just because the appellant has not produced purchase and sale agreements of the property, the AO is not entitled to change the head o income. Considering the totality of the facts and circumstances of the issues involved, the addition of Rs.25,54,440/ this ground no. 3 of appeal is allowed. 15. We have heard rival submission of the parti dispute and perused the relevant material on record. We find that the Assessing Officer has only change income was already declared by the assessee as business profit. The Ld. Assessing Officer has not brought business activity of the assessee gain,ignoring the transactions of the assessee of purchase and sale in earlier as well as subsequent assessment years. In our opinion, the Ld. CIT(A) has corre entitled to change the head of the income just because the assessee ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 place. Given the fact that the assessee has not produced any evidences in the form of purchase agreement and sale 7.3 From the assessment order it appears that the AO has formed his view only on the basis of section 45 of the IT Act, wherein the provision says that any profit or ga from the transfer of a capital asset affected in the previous year shall be chargeable to income tax under the head "Capital Gains" According to the AO, since the appellant did not produce evidences in the form of purchase agreement and sale agreement of the property, the impugned addition was made. I find the above observation of the AO lacks in merit. It appears that the AO has completely ignored the accounts of the appellant where such transactions (sale and purchase) in land, flats etc. are regularly done and profit from the same is offered through the profit and loss account in the preceding and seceding years.Just because the appellant has not produced purchase and sale agreements of the property, the AO is not entitled to change the head o income. Considering the totality of the facts and circumstances of the issues involved, the addition of Rs.25,54,440/- under the head STCG is deleted. Therefore, this ground no. 3 of appeal is allowed.” We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that the Assessing Officer has only changed the head of the income as income was already declared by the assessee as business profit. The Ld. Assessing Officer has not brought on record as how otherwise a business activity of the assessee can be held as short ignoring the transactions of the assessee of purchase and sale as well as subsequent assessment years. In our opinion, has correctly held that the Assessing Officer entitled to change the head of the income just because the assessee Shri Narendra S Shah 26 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 e has not produced any evidences in the form of purchase agreement and sale 7.3 From the assessment order it appears that the AO has formed his view only on the basis of section 45 of the IT Act, wherein the provision says that any profit or gains arising from the transfer of a capital asset affected in the previous year shall be chargeable to income tax under the head "Capital Gains" According to the AO, since the appellant did not produce evidences in the form of purchase agreement reement of the property, the impugned addition was made. I find the above observation of the AO lacks in merit. It appears that the AO has completely ignored the accounts of the appellant where such transactions (sale and regularly done and profit from the same is offered through the profit and loss account in the preceding and seceding years.Just because the appellant has not produced purchase and sale agreements of the property, the AO is not entitled to change the head of the income. Considering the totality of the facts and circumstances of the issues involved, the addition of under the head STCG is deleted. Therefore, es on the issue in dispute and perused the relevant material on record. We find that of the income as income was already declared by the assessee as business profit. The how otherwise a short-term capital ignoring the transactions of the assessee of purchase and sale as well as subsequent assessment years. In our opinion, ctly held that the Assessing Officer was not entitled to change the head of the income just because the assessee had not produced purchase and sale agreement of the property. We do not find any error in the order of the Ld. CIT(A) on the issue in dispute and accordingly the appeal of the Revenue is accordingly dismissed. 16. The ground No. 3 and 4 of the appeal of the Revenue being connected with the ground No. 1 and 2 of the appeal and therefore same are also dismissed. 17. Now, we take up the appeal of the assessee for assessment year 2014-15 having ITA No. 2007/Mum/2022. The grounds raised by the assessee are reproduced as under: 1. On the facts circumstances of the case and in law, the Hon'ble CIT(A) erred in uphol assessment passed u/s 147 of the IT Act 1961 by the Ld AO without appreciating that the reopening is bad in law and the reason assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and rules made there under. 2. On the fact and in law, the Hon'ble CIT(A) erred in upholding the addition of Rs.5,23,00,000/ treating unsecured loan availed from the company in which his wife is one of the directors by merely relying on the content that the name of the company has been struck off from the register of the companies without appreciating that the name has been removed for non-filling of financial statements and not because this is an accommodation providing company as h cash credit u/s 68 of the IT Act 1961 and the reason assigned for doing so are wrong and ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 purchase and sale agreement of the property. We do not find any error in the order of the Ld. CIT(A) on the issue in nd accordingly, we uphold the same. The ground No. 2 of the appeal of the Revenue is accordingly dismissed. The ground No. 3 and 4 of the appeal of the Revenue being connected with the ground No. 1 and 2 of the appeal and therefore ssed. we take up the appeal of the assessee for assessment 15 having ITA No. 2007/Mum/2022. The grounds raised by the assessee are reproduced as under: On the facts circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the assessment passed u/s 147 of the IT Act 1961 by the Ld AO without appreciating that the reopening is bad in law and the reason assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and rules made there under. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the addition of Rs.5,23,00,000/- by wrongly treating unsecured loan availed from the company in which his wife is one of the directors by merely relying on the contention of the Ld AO that the name of the company has been struck off from the register of the companies without appreciating that the name has been removed for filling of financial statements and not because this is an accommodation providing company as held by the Ld A0 as unexplained cash credit u/s 68 of the IT Act 1961 and the reason assigned for doing so are wrong and Shri Narendra S Shah 27 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 purchase and sale agreement of the property. We do not find any error in the order of the Ld. CIT(A) on the issue in we uphold the same. The ground No. 2 of The ground No. 3 and 4 of the appeal of the Revenue being connected with the ground No. 1 and 2 of the appeal and therefore we take up the appeal of the assessee for assessment 15 having ITA No. 2007/Mum/2022. The grounds raised On the facts circumstances of the case and in ding the assessment passed u/s 147 of the IT Act 1961 by the Ld AO without appreciating that the reopening is bad in law and the reason assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and rules made there under. s and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding by wrongly treating unsecured loan availed from the company in which his wife is one of the directors ion of the Ld AO that the name of the company has been struck off from the register of the companies without appreciating that the name has been removed for filling of financial statements and not because this is an accommodation providing eld by the Ld A0 as unexplained cash credit u/s 68 of the IT Act 1961 and the reason assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and rules made there under. 3. On the facts and in the circumstances of the case and in law, the penalty initiated by the Ld AO u/s. 271(1)(c) of the IT Act 1961 and the reason assigned for doing so are wrong and contrary to the provision of Income Tax Act and rules made there under. 18. In ground No. 1, the a reassessment proceedings, the issue of validity of the reassessment was also challenged by the assessee before the Ld. CIT(A). The Ld. CIT(A) dismissed the ground after analyzing facts of the case of the assessee and relying on the various decisions cited in the impugned order. The relevant finding of the Ld. CIT(A) is reproduced as under: “6. Decision on Ground No. 1: I have carefully considered the facts of the case, submissions of the Appellant, the observations of assessment order and the other materials on record on this issue. In this Ground the appellant has contended that the AO has not brought on record any valid reason initiation of reassessment proceedings. During the course of the appe proceedings, it was submitted by the appellant there is no correlation between the reason for reopening and addition made by the AO. 6.1 I have taken note of the fact that the A.. has issued notice after duly recording the reasons and taking approval as per the provisions of section148 of the Act. Further, a copy of the reasons recorded has been provided to the Appellant, during the course of the assessment proceedings. Thus, there has not been any violation of the principles of natural justice by the AO. The AO has followed the due procedure and there is no technical lapse on the part of the AO in reopening of the assessment proceedings. The AO has clearly noted the reason for reopening of the case as under: ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 contrary to the Provisions of Income Tax Act and rules made there under. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the penalty initiated by the Ld AO u/s. 271(1)(c) of the IT Act 1961 and the reason assigned for doing so are wrong and contrary to the provision of Income Tax Act and rules made there under. In ground No. 1, the assessee has challenged validity of the reassessment proceedings, the issue of validity of the reassessment was also challenged by the assessee before the Ld. CIT(A). The Ld. CIT(A) dismissed the ground after analyzing facts of the case of the relying on the various decisions cited in the impugned order. The relevant finding of the Ld. CIT(A) is reproduced as under: 6. Decision on Ground No. 1: I have carefully considered the facts of the case, submissions of the Appellant, the observations of the A contained in the assessment order and the other materials on record on this issue. In this Ground the appellant has contended that the AO has not brought on record any valid reason initiation of reassessment proceedings. During the course of the appe proceedings, it was submitted by the appellant there is no correlation between the reason for reopening and addition made by the AO. 6.1 I have taken note of the fact that the A.. has issued notice after duly recording the reasons and taking approval as per the provisions of section148 of the Act. Further, a copy of the reasons recorded has been provided to the Appellant, during the course of the assessment proceedings. Thus, there has not been any violation of the principles of natural justice e AO. The AO has followed the due procedure and there is no technical lapse on the part of the AO in reopening of the assessment proceedings. The AO has clearly noted the reason for reopening of the case as under: Shri Narendra S Shah 28 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 contrary to the Provisions of Income Tax Act and On the facts and in the circumstances of the case the Hon'ble CIT(A) erred in upholding the penalty initiated by the Ld AO u/s. 271(1)(c) of the IT Act 1961 and the reason assigned for doing so are wrong and contrary to the provision of Income Tax Act and rules made there under. ssessee has challenged validity of the reassessment proceedings, the issue of validity of the reassessment was also challenged by the assessee before the Ld. CIT(A). The Ld. CIT(A) dismissed the ground after analyzing facts of the case of the relying on the various decisions cited in the impugned order. The relevant finding of the Ld. CIT(A) is reproduced as under: I have carefully considered the facts of the case, submissions the A contained in the assessment order and the other materials on record on this issue. In this Ground the appellant has contended that the AO has not brought on record any valid reason initiation of reassessment proceedings. During the course of the appellate proceedings, it was submitted by the appellant there is no correlation between the reason for reopening and addition 6.1 I have taken note of the fact that the A.. has issued notice after duly recording the reasons and taking approval, as per the provisions of section148 of the Act. Further, a copy of the reasons recorded has been provided to the Appellant, during the course of the assessment proceedings. Thus, there has not been any violation of the principles of natural justice e AO. The AO has followed the due procedure and there is no technical lapse on the part of the AO in reopening of the assessment proceedings. The AO has clearly noted the The reason for reopening in the case was r "An information has been received from ITO Ward 32(3)(2), Mumbai vide letter NO. IT032(3)(2)/Information/2018 dated 14.02.2019 that the bank statement of MsKalpanikVyapaar Pt Ltd (AADCK3638E) with ICICI Bank Ltd. (A/c no 003505500471), 2013-14 reveals payment to Shri Narendra Shah on various dates for the 1.4.2013 to 18.02.2014 amounting to Rs 4,14,00,000/. M/ KalpanikVyapaar Pvt. Ltdhaving address 32, Ezra Street, 5th Floor, Kolkata has been declared a shell company by SEBI. Enquiries have revealed that M/s KalpanikVyapar Pvt. Ltd. has been removed/ struck off from the register of Companies by the Registrar of Companies, Kolkota and the directors of the said company have also been declared as Disqualified Directors' under section 164(2)(a) of the Companies Act. It is pertinentto mention that the assessee is one of the Directors of the said company declared as disqualified director by ROC. Kolkota. On verification of the assessee's bank statement with ICICI Bank the total credits from M/s KalpanikVyapaar Ltd during the Fy 2013-14 amount to Rs.5,23,00,000/ available forA. Y 2015 13,33,21,520/ appears as unsecured loan from MsKalpanikVy Rs.7,44,71,520/ relevant to A,Y 2015 Rs.5,23,00,000/ KalpanikWyapaar Pvt. Ltd as unsecured loan during F.Y 2013-14 relevant unsecured loan of Rs.5.23,00,000/ received by the assessee from M/s KalpanikVyupaar Pvt. Ltd is not genuine. Thus, there was new tangible material on record of the AO on the basis of which the re been initiated. Further, the assessee raised an objection on reopening of the case. Accordingly, Order disposing off the obiection raised dated 27.09.2019 was sent to the assessee 6.2 The Section 147 of the Act authorizes and permits the Assessing Officer to assess or reassess income chargeable to ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 The reason for reopening in the case was recorded as under: "An information has been received from ITO Ward 32(3)(2), Mumbai vide letter NO. IT032(3)(2)/Information/2018 dated 14.02.2019 that the bank statement of MsKalpanikVyapaar Pt Ltd (AADCK3638E) with ICICI Bank Ltd. (A/c no 003505500471), Dahisar Branch for the F.Y 14 reveals payment to Shri Narendra Shah on various dates for the 1.4.2013 to 18.02.2014 amounting to Rs 4,14,00,000/. M/ KalpanikVyapaar Pvt. Ltdhaving address 32, Ezra Street, 5th Floor, Kolkata has been declared a shell company by SEBI. Enquiries have revealed that M/s KalpanikVyapar Pvt. Ltd. has been removed/ struck off from the register of Companies by the Registrar of Companies, Kolkota and the directors of the said company have also been declared as Disqualified ctors' under section 164(2)(a) of the Companies Act. It is pertinentto mention that the assessee is one of the Directors of the said company declared as disqualified director by ROC. Kolkota. On verification of the assessee's bank statement with ICICI Bank Ltd. (OD AC0156), it is seen that the total credits from M/s KalpanikVyapaar Ltd during the 14 amount to Rs.5,23,00,000/- As per the detalls available forA. Y 2015-16, a total amount of Rs. 13,33,21,520/ appears as unsecured loan from MsKalpanikVyapaar Pvt. Ltd. of which only an amount of Rs.7,44,71,520/- was received during the F.Y 2014 relevant to A,Y 2015-16. Hence, an amount of Rs.5,23,00,000/- has been received from M/s KalpanikWyapaar Pvt. Ltd as unsecured loan during F.Y 14 relevant toA.Y 2014-15. It therefore, evident that the unsecured loan of Rs.5.23,00,000/ received by the assessee from M/s KalpanikVyupaar Pvt. Ltd is not genuine. Thus, there was new tangible material on record of the AO on the basis of which the re-assessment proceedings has been initiated. Further, the assessee raised an objection on reopening of the case. Accordingly, Order disposing off the obiection raised dated 27.09.2019 was sent to the assessee 6.2 The Section 147 of the Act authorizes and permits the ssing Officer to assess or reassess income chargeable to Shri Narendra S Shah 29 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 ecorded as under: "An information has been received from ITO Ward 32(3)(2), Mumbai vide letter NO. IT032(3)(2)/Information/2018-19 dated 14.02.2019 that the bank statement of MsKalpanikVyapaar Pt Ltd (AADCK3638E) with ICICI Bank Dahisar Branch for the F.Y 14 reveals payment to Shri Narendra Shah on various dates for the 1.4.2013 to 18.02.2014 amounting to Rs 4,14,00,000/. M/ KalpanikVyapaar Pvt. Ltdhaving address 32, Ezra Street, 5th Floor, Kolkata has been declared a shell Enquiries have revealed that M/s KalpanikVyapar Pvt. Ltd. has been removed/ struck off from the register of Companies by the Registrar of Companies, Kolkota and the directors of the said company have also been declared as Disqualified ctors' under section 164(2)(a) of the Companies Act. It is pertinentto mention that the assessee is one of the Directors of the said company declared as disqualified director by ROC. Kolkota. On verification of the assessee's bank Ltd. (OD AC0156), it is seen that the total credits from M/s KalpanikVyapaar Ltd during the As per the detalls 16, a total amount of Rs. 13,33,21,520/ appears as unsecured loan from apaar Pvt. Ltd. of which only an amount of was received during the F.Y 2014-15 16. Hence, an amount of has been received from M/s KalpanikWyapaar Pvt. Ltd as unsecured loan during F.Y 15. It therefore, evident that the unsecured loan of Rs.5.23,00,000/ received by the assessee from M/s KalpanikVyupaar Pvt. Ltd is not genuine. Thus, there was new tangible material on record of the AO ceedings has been initiated. Further, the assessee raised an objection on reopening of the case. Accordingly, Order disposing off the obiection raised dated 27.09.2019 was sent to the assessee. 6.2 The Section 147 of the Act authorizes and permits the ssing Officer to assess or reassess income chargeable to tax, if he has reason to believe that income for any assessment year has escaped assessment. The word "reason" in the phrase "reason to believe" would mean cause or justification. If the Assessing Of justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. The function of the Assessing Officer is to administer the statute with solicitude for the public exchequer with an inbuilt idea of fairness to taxpayers. 6.3At the stage of issue of notice, the only ques whether there was relevant material on which a reasonable person could have formed a requisite belief. Whether the materials would conclusively prove the escapement is not the concern at that stage. At that stage, the final outcome of the proceeding is not relevant. In other words, at the initiation stage, what is required is "reason to believe", but not the established fact of escapement of income. This is so because the formation of belief by the Assessing Officer is within the realm of subjective Coal Co. (P.) Ltd. /19961 217ITR 597 (SC); Raymond Woollen Mills Ltd, v. ITO [1999] 236 ITR 34 (SC). 6.4 The Hon'ble Apex Court in the case of ACIT vs. Rajesh Thaveri Stock Brokers Pvt. Ltd. (2007) (291 IT 500) has categorically stated that "reason to believe" does not mean that the reason for re ascertained by legal evidence or conclusion before the re opening of an assessment. 6.5 Any fresh information received by the AO. can entit to issue notice u/s.148, if on the basis of such information he has prima face reason to believe that income has escaped assessment. So much so that it was held by the Hon'ble Supreme Court in Claggett Brachi Co. Ltd. vs CIT 177 IT 409 (SC) that inf proceedings of a subsequent year can also validate the proceedings initiated us.147 for earlier year. Similarly, Hon'ble Bombay High Court in the case of Anusandhan Investments Ltd. vs.M.R. Singh, DCIT, 287 IT 482 held t ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 tax, if he has reason to believe that income for any assessment year has escaped assessment. The word "reason" in the phrase "reason to believe" would mean cause or justification. If the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expression cannot be read to mean that the Assessing Officer should have finally ertained the fact by legal evidence or conclusion. The function of the Assessing Officer is to administer the statute with solicitude for the public exchequer with an inbuilt idea of fairness to taxpayers. 6.3At the stage of issue of notice, the only ques whether there was relevant material on which a reasonable person could have formed a requisite belief. Whether the materials would conclusively prove the escapement is not the concern at that stage. At that stage, the final outcome of the g is not relevant. In other words, at the initiation stage, what is required is "reason to believe", but not the established fact of escapement of income. This is so because the formation of belief by the Assessing Officer is within the realm of subjective satisfaction ITO v. Selected Dalurband Coal Co. (P.) Ltd. /19961 217ITR 597 (SC); Raymond Woollen Mills Ltd, v. ITO [1999] 236 ITR 34 (SC). 6.4 The Hon'ble Apex Court in the case of ACIT vs. Rajesh Thaveri Stock Brokers Pvt. Ltd. (2007) (291 IT 500) has ategorically stated that "reason to believe" does not mean that the reason for re-opening should have been factually ascertained by legal evidence or conclusion before the re opening of an assessment. 6.5 Any fresh information received by the AO. can entit to issue notice u/s.148, if on the basis of such information he has prima face reason to believe that income has escaped assessment. So much so that it was held by the Hon'ble Supreme Court in Claggett Brachi Co. Ltd. vs CIT 177 IT 409 (SC) that information obtained during assessment proceedings of a subsequent year can also validate the proceedings initiated us.147 for earlier year. Similarly, Hon'ble Bombay High Court in the case of Anusandhan Investments Ltd. vs.M.R. Singh, DCIT, 287 IT 482 held t Shri Narendra S Shah 30 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 tax, if he has reason to believe that income for any assessment year has escaped assessment. The word "reason" in the phrase "reason to believe" would mean cause ficer has cause or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expression cannot be read to mean that the Assessing Officer should have finally ertained the fact by legal evidence or conclusion. The function of the Assessing Officer is to administer the statute with solicitude for the public exchequer with an inbuilt idea 6.3At the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief. Whether the materials would conclusively prove the escapement is not the concern at that stage. At that stage, the final outcome of the g is not relevant. In other words, at the initiation stage, what is required is "reason to believe", but not the established fact of escapement of income. This is so because the formation of belief by the Assessing Officer is within the satisfaction ITO v. Selected Dalurband Coal Co. (P.) Ltd. /19961 217ITR 597 (SC); Raymond Woollen 6.4 The Hon'ble Apex Court in the case of ACIT vs. Rajesh Thaveri Stock Brokers Pvt. Ltd. (2007) (291 IT 500) has ategorically stated that "reason to believe" does not mean opening should have been factually ascertained by legal evidence or conclusion before the re- 6.5 Any fresh information received by the AO. can entitle him to issue notice u/s.148, if on the basis of such information he has prima face reason to believe that income has escaped assessment. So much so that it was held by the Hon'ble Supreme Court in Claggett Brachi Co. Ltd. vs CIT 177 IT 409 ormation obtained during assessment proceedings of a subsequent year can also validate the proceedings initiated us.147 for earlier year. Similarly, Hon'ble Bombay High Court in the case of Anusandhan Investments Ltd. vs.M.R. Singh, DCIT, 287 IT 482 held that a notice issued u/s.148 based on assessment of subsequent assessment year is valid even if the appeal is pending for such assessment. 6.6 Further, it is the duty of the assessee to disclose full and true materials to the A.O. but for which the A.. coul the reassessment proceedings.It has been held by the Hon'ble Supreme Court in Shri Krishna P. Ltd. 221 ITR538, 549 that every disclosure is not and cannot be treated to be a true and full disclosure. A disclosure may be a false one or a true one. It may be a full disclosure or it may not be. The Hon'ble Supreme Court held that a partial disclosure may very often be a misleading one. Therefore, what is required is a full and true disclosure of all material facts necessary for making assessment for 6.7 The Hon'ble Supreme Court in the case of Raymond Woollen Mills Ltd.VS. ITO 236 IT 34, 35 (SC) has held that for determining whether initiation of reassessment proceedings was valid, it has only to be seen whether there was prima face some m could reopen the case. It further held that the sufficiency or correctness of the material is not a thing to be considered at this stage. 6.8 The present case is not one of change of opinion as alleged by the ap arises when the AO forms an opinion and decides not to make an addition and holds that the appellant was correct in his stand. 6.9 The Supreme Court in Malegaon Electricity Co. (P) Ltd. vs. CIT (1970) 78ITR 466 (SC) h 'It is true that if the ITO had made some investigation, particularly if he had looked into the previous assessment records, he would have been able to find out what the written down value of the assets sold was and consequently he would have been able to find out the price in excess of their written down value realized by the assessee. It can be said that the ITO if he had been diligent could have got all the necessary information from his records. But that is not the same thing as s ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 notice issued u/s.148 based on assessment of subsequent assessment year is valid even if the appeal is pending for such assessment. 6.6 Further, it is the duty of the assessee to disclose full and true materials to the A.O. but for which the A.. coul the reassessment proceedings.It has been held by the Hon'ble Supreme Court in Shri Krishna P. Ltd. 221 ITR538, 549 that every disclosure is not and cannot be treated to be a true and full disclosure. A disclosure may be a false one or . It may be a full disclosure or it may not be. The Hon'ble Supreme Court held that a partial disclosure may very often be a misleading one. Therefore, what is required is a full and true disclosure of all material facts necessary for making assessment for that year. 6.7 The Hon'ble Supreme Court in the case of Raymond Woollen Mills Ltd.VS. ITO 236 IT 34, 35 (SC) has held that for determining whether initiation of reassessment proceedings was valid, it has only to be seen whether there was prima face some material on the basis of which the department could reopen the case. It further held that the sufficiency or correctness of the material is not a thing to be considered at 6.8 The present case is not one of change of opinion as alleged by the appellant. Question of change of opinion arises when the AO forms an opinion and decides not to make an addition and holds that the appellant was correct in 6.9 The Supreme Court in Malegaon Electricity Co. (P) Ltd. vs. CIT (1970) 78ITR 466 (SC) has observed, as under: 'It is true that if the ITO had made some investigation, particularly if he had looked into the previous assessment records, he would have been able to find out what the written down value of the assets sold was and consequently ould have been able to find out the price in excess of their written down value realized by the assessee. It can be said that the ITO if he had been diligent could have got all the necessary information from his records. But that is not the same thing as saying that the assessee had placed Shri Narendra S Shah 31 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 notice issued u/s.148 based on assessment of subsequent assessment year is valid even if the appeal is pending for 6.6 Further, it is the duty of the assessee to disclose full and true materials to the A.O. but for which the A.. could initiate the reassessment proceedings.It has been held by the Hon'ble Supreme Court in Shri Krishna P. Ltd. 221 ITR538, 549 that every disclosure is not and cannot be treated to be a true and full disclosure. A disclosure may be a false one or . It may be a full disclosure or it may not be. The Hon'ble Supreme Court held that a partial disclosure may very often be a misleading one. Therefore, what is required is a full and true disclosure of all material facts necessary for 6.7 The Hon'ble Supreme Court in the case of Raymond Woollen Mills Ltd.VS. ITO 236 IT 34, 35 (SC) has held that for determining whether initiation of reassessment proceedings was valid, it has only to be seen whether there was prima aterial on the basis of which the department could reopen the case. It further held that the sufficiency or correctness of the material is not a thing to be considered at 6.8 The present case is not one of change of opinion as pellant. Question of change of opinion arises when the AO forms an opinion and decides not to make an addition and holds that the appellant was correct in 6.9 The Supreme Court in Malegaon Electricity Co. (P) Ltd. vs. as observed, as under: 'It is true that if the ITO had made some investigation, particularly if he had looked into the previous assessment records, he would have been able to find out what the written down value of the assets sold was and consequently ould have been able to find out the price in excess of their written down value realized by the assessee. It can be said that the ITO if he had been diligent could have got all the necessary information from his records. But that is not aying that the assessee had placed before the ITO truly and fully all material facts necessary for the purpose of assessment.The law casts a duty on the assessee to 'disclose fully and truly all material facts necessary for his assessment for that year." 6.10 When there is no discussion on the issue in the Assessment order and no details were called for by the AO or filed by the assessee on the issue, no finding either positive or negative can be said to have been arrived at during the course of original as there is no question of change of opinion as held in the following judgments: 1. Kalyanji Mavji& Co. vs. CIT 102 ITR 287 (SC) 2. Esskay Engineering P. Ltd. Vs. CIT 247 IT 818 3. ITO vs. Purushottam Das Bangur&Anr. 224 IT 362 (S 6.11 In Writ Petition. No.9036 of 2007, Honda Siel Power Products Ltd. vs.Dy CIT &Anr. Decision dated 14th Feb. 2011 (reported at (2011) 52 DTR (el)353 "10 The term 'failure' on the part of the assessee is not restricted only to the return or the tax audit report. This is the first stage. The said expression 'failure to fully and truly disclose material facts' also relate to the stage of the assessment proceeding, the second stage. There can be omis of the assessee to disclose fully and truly material facts during- the course of the assessment proceedings. This can happen when the assessee does not disclose or furnish to the A0 complete and correct information and details required and under an obligation to disclose. Burden is on the assessee to make full and the true disclosure". 6.12 Further, in the case of Piaggio Vehicles P. Ltd. YS. DCIT 290 IT 377 (Bom), the Hon'ble Jurisdictional High Court held that in a case scrutiny assessments, contradiction was discovered between Tax Audit report and Return of income, it was a case of omission and/or failure on the part of the assessee to disclose fully and truly all facts for compu It is also held by Hon'ble Supreme Court in the following ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 before the ITO truly and fully all material facts necessary for the purpose of assessment.The law casts a duty on the assessee to 'disclose fully and truly all material facts necessary for his assessment for that year." .10 When there is no discussion on the issue in the Assessment order and no details were called for by the AO or filed by the assessee on the issue, no finding either positive or negative can be said to have been arrived at during the course of original assessment proceedings. Hence, there is no question of change of opinion as held in the following judgments: 1. Kalyanji Mavji& Co. vs. CIT 102 ITR 287 (SC) 2. Esskay Engineering P. Ltd. Vs. CIT 247 IT 818 3. ITO vs. Purushottam Das Bangur&Anr. 224 IT 362 (S 6.11 In Writ Petition. No.9036 of 2007, Honda Siel Power Products Ltd. vs.Dy CIT &Anr. Decision dated 14th Feb. 2011 (reported at (2011) 52 DTR (el)353 - Ed.) it was held: "10 The term 'failure' on the part of the assessee is not restricted only to the IT return and the columns of the IT return or the tax audit report. This is the first stage. The said expression 'failure to fully and truly disclose material facts' also relate to the stage of the assessment proceeding, the second stage. There can be omission and failure on the part. of the assessee to disclose fully and truly material facts the course of the assessment proceedings. This can happen when the assessee does not disclose or furnish to the A0 complete and correct information and details required and under an obligation to disclose. Burden is on the assessee to make full and the true disclosure". 6.12 Further, in the case of Piaggio Vehicles P. Ltd. YS. DCIT 290 IT 377 (Bom), the Hon'ble Jurisdictional High Court held that in a case of reopening after 4 years subsequent to scrutiny assessments, contradiction was discovered between Tax Audit report and Return of income, it was a case of omission and/or failure on the part of the assessee to disclose fully and truly all facts for computation of its income. It is also held by Hon'ble Supreme Court in the following Shri Narendra S Shah 32 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 before the ITO truly and fully all material facts necessary for the purpose of assessment.The law casts a duty on the assessee to 'disclose fully and truly all material facts .10 When there is no discussion on the issue in the Assessment order and no details were called for by the AO or filed by the assessee on the issue, no finding either positive or negative can be said to have been arrived at sessment proceedings. Hence, there is no question of change of opinion as held in the 3. ITO vs. Purushottam Das Bangur&Anr. 224 IT 362 (SC) 6.11 In Writ Petition. No.9036 of 2007, Honda Siel Power Products Ltd. vs.Dy CIT &Anr. Decision dated 14th Feb. Ed.) it was held: "10 The term 'failure' on the part of the assessee is not IT return and the columns of the IT return or the tax audit report. This is the first stage. The said expression 'failure to fully and truly disclose material facts' also relate to the stage of the assessment proceeding, the sion and failure on the part. of the assessee to disclose fully and truly material facts the course of the assessment proceedings. This can happen when the assessee does not disclose or furnish to the A0 complete and correct information and details it is required and under an obligation to disclose. Burden is on the assessee to make full and the true disclosure". 6.12 Further, in the case of Piaggio Vehicles P. Ltd. YS. DCIT 290 IT 377 (Bom), the Hon'ble Jurisdictional High Court held of reopening after 4 years subsequent to scrutiny assessments, contradiction was discovered between Tax Audit report and Return of income, it was a case of omission and/or failure on the part of the assessee to tation of its income. It is also held by Hon'ble Supreme Court in the following cases that facts which could have been found by the ITO by further probing are covered under failure to disclose fully and truly all material facts. 6.13 In the case of Coca Co 221 CTR 0225 :(2009) 17 DTR 0066 : (2009) 309 IT 0194 : (2009) 177 TAXMAN 0103, the Hon'ble Punjab & Haryana High Court has held that notice u/s 147 should be held as bad in law, only if extraneous or absurd reasons are recorded by the AO. It was further held by the Hon'ble Court that whether or not the material should be finally taken into account for reassessment is a separate matter, which has to be dealt with during the course of reassessment proceedings. The relevant port reproduced as under: "Obiection of counsel for petitioner is two fold : to inapplicable provision of s. 92 as it stood prior to amendment w.e.f. 1st April, 2002 and (b) irrelevance of order of the TPO subsequent assessment year.Applicability of s. 147 requires formation of opinion that income escaped assessment. The said provision is not in any manner controlled by s. 92 nor there is any limit to consideration of a nexus with the opinion on the issue of escapement of assessment of income. Interference with the notice for reassessment is called for only where extraneous or absurd reasons are made the basis for opinion proposing to reassess. Apart fr reasons, it cannot be held that the material relied upon by the AO for proposing reassessment is irrelevant. Whether or not the said material should be finally taken into account for reassessment is a matter which ha decided hy the AO after considering the explanation of the assessee. It can only he mentioned that having regard to relationship of the petitioner to its associate company, it cannot be claimed that the price mentioned by it must be accepted as final and may not be looked at by the AO. There is no infirmity in the notice proposing reassessment. The AO will be at liberty to pass an appropriate order of assessment, subject to the rights and remedies of the assessee.Order of TPO can cer that income has been incorrectly assessed or has escaped ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 cases that facts which could have been found by the ITO by further probing are covered under failure to disclose fully and truly all material facts. 6.13 In the case of Coca Cola India Vs. ACIT &Ors. (2009) 221 CTR 0225 :(2009) 17 DTR 0066 : (2009) 309 IT 0194 : (2009) 177 TAXMAN 0103, the Hon'ble Punjab & Haryana High Court has held that notice u/s 147 should be held as bad in law, only if extraneous or absurd reasons are ded by the AO. It was further held by the Hon'ble Court that whether or not the material should be finally taken into account for reassessment is a separate matter, which has to be dealt with during the course of reassessment proceedings. The relevant portion of the judgment in this regard is reproduced as under: - "Obiection of counsel for petitioner is two fold :- (a) Reference to inapplicable provision of s. 92 as it stood prior to amendment w.e.f. 1st April, 2002 and (b) irrelevance of order of the TPO under Chanter X passed in respect of a subsequent assessment year.Applicability of s. 147 requires formation of opinion that income escaped assessment. The said provision is not in any manner controlled by s. 92 nor there is any limit to consideration of any material having nexus with the opinion on the issue of escapement of assessment of income. Interference with the notice for reassessment is called for only where extraneous or absurd reasons are made the basis for opinion proposing to reassess. Apart from the fact that the AO has given other reasons, it cannot be held that the material relied upon by the AO for proposing reassessment is irrelevant. Whether or not the said material should be finally taken into account for reassessment is a matter which has to be left open to he decided hy the AO after considering the explanation of the assessee. It can only he mentioned that having regard to relationship of the petitioner to its associate company, it cannot be claimed that the price mentioned by it must be accepted as final and may not be looked at by the AO. There is no infirmity in the notice proposing reassessment. The AO will be at liberty to pass an appropriate order of assessment, subject to the rights and remedies of the assessee.Order of TPO can certainly have nexus for reaching the conclusion that income has been incorrectly assessed or has escaped Shri Narendra S Shah 33 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 cases that facts which could have been found by the ITO by further probing are covered under failure to disclose fully and la India Vs. ACIT &Ors. (2009) 221 CTR 0225 :(2009) 17 DTR 0066 : (2009) 309 IT 0194 : (2009) 177 TAXMAN 0103, the Hon'ble Punjab & Haryana High Court has held that notice u/s 147 should be held as bad in law, only if extraneous or absurd reasons are ded by the AO. It was further held by the Hon'ble Court that whether or not the material should be finally taken into account for reassessment is a separate matter, which has to be dealt with during the course of reassessment proceedings. ion of the judgment in this regard is (a) Reference to inapplicable provision of s. 92 as it stood prior to amendment w.e.f. 1st April, 2002 and (b) irrelevance of order under Chanter X passed in respect of a subsequent assessment year.Applicability of s. 147 requires formation of opinion that income escaped assessment. The said provision is not in any manner controlled by s. 92 nor ny material having nexus with the opinion on the issue of escapement of assessment of income. Interference with the notice for reassessment is called for only where extraneous or absurd reasons are made the basis for opinion proposing to om the fact that the AO has given other reasons, it cannot be held that the material relied upon by the AO for proposing reassessment is irrelevant. Whether or not the said material should be finally taken into account for s to be left open to he decided hy the AO after considering the explanation of the assessee. It can only he mentioned that having regard to relationship of the petitioner to its associate company, it cannot be claimed that the price mentioned by it must be accepted as final and may not be looked at by the AO. There is no infirmity in the notice proposing reassessment. The AO will be at liberty to pass an appropriate order of assessment, subject to the rights and remedies of the assessee.Order of tainly have nexus for reaching the conclusion that income has been incorrectly assessed or has escaped assessment. In the present case, the said material came to the notice of the AO subsequent to the assessment. There is no grievance that provisions of ss followed. In such a situation, it cannot be held that the notice proposing reassessment is vitiated merely because one of the reasons referred to order of TPO. vs. ITO &Ors. (1999) 152 CTR SC) 418 : (19 (SC) and Phool Chand Bairang Lal vs. ITO (1993) 113 CTR (SC) 436 : (1993) 203 IT 456 (SC) : AIR 1993SC 2390 relied on." 6.14 In similar facts and circumstances, in the case of Ankit Agrochem (P.)Ltd. Vs. Joint Commissioner of Income Range-1, Bikaner (2018] 89 taxmann.com 45 (Raiasthan), the Hon'ble Rajasthan High court has held that where the DIT has informed that the assessee application money from several entities, which were only engaged in business of provi entries to beneficiary concerns, reassessment on basis of said information was justified. In this case all the entities from which the assessee had received share application money were only engaged in the business of providing accommodation entries of bogus nature, which was further confirmed by the directors, dummy directors/key persons of the above entities in their respective statements. The relevant portion of the said judgment is reproduced hereunder: "14. In the instant case the 10 for issuing notice under Section 148 of the Act reveals that during the assessment proceedings for AY. 2014 was noticed that the appellant assessee has received share application money to the tune of Rs. which was utilised during the year and subsequently returned in Financial Year 2013 examination of certain information received from the Directorate of Investigation, Kolkata which had carried the investigation in the case of the 9 entities, details whereof has been set out in the reasons recorded, it was ascertained that those 9 entities are the companies with no real business and are only engaged in business of providing accommodation entries of bogus n further confirmed by the directors/dummy directors/key persons of the said entities in their respective statements. ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 assessment. In the present case, the said material came to the notice of the AO subsequent to the assessment. There is no grievance that provisions of ss. 148 to 153 have not been followed. In such a situation, it cannot be held that the notice proposing reassessment is vitiated merely because one of the reasons referred to order of TPO.-Raymond Woollen Mills Ltd. vs. ITO &Ors. (1999) 152 CTR SC) 418 : (1999) 236 ITR 34 (SC) and Phool Chand Bairang Lal vs. ITO (1993) 113 CTR (SC) 436 : (1993) 203 IT 456 (SC) : AIR 1993SC 2390 relied 6.14 In similar facts and circumstances, in the case of Ankit Agrochem (P.)Ltd. Vs. Joint Commissioner of Income 1, Bikaner (2018] 89 taxmann.com 45 (Raiasthan), the Hon'ble Rajasthan High court has held that where the DIT has informed that the assessee-company had received share application money from several entities, which were only engaged in business of providing bogus accommodation entries to beneficiary concerns, reassessment on basis of said information was justified. In this case all the entities from which the assessee had received share application money were only engaged in the business of providing ommodation entries of bogus nature, which was further confirmed by the directors, dummy directors/key persons of the above entities in their respective statements. The relevant portion of the said judgment is reproduced hereunder: "14. In the instant case, a perusal of the reasons recorded by the 10 for issuing notice under Section 148 of the Act reveals that during the assessment proceedings for AY. 2014 was noticed that the appellant assessee has received share application money to the tune of Rs. 2.2 crore from 9 entities which was utilised during the year and subsequently returned in Financial Year 2013-14. That apart, on further examination of certain information received from the Directorate of Investigation, Kolkata which had carried the igation in the case of the 9 entities, details whereof has been set out in the reasons recorded, it was ascertained that those 9 entities are the companies with no real business and are only engaged in business of providing accommodation entries of bogus nature to beneficiary concerns which was further confirmed by the directors/dummy directors/key persons of the said entities in their respective statements. Shri Narendra S Shah 34 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 assessment. In the present case, the said material came to the notice of the AO subsequent to the assessment. There is . 148 to 153 have not been followed. In such a situation, it cannot be held that the notice proposing reassessment is vitiated merely because one of the Raymond Woollen Mills Ltd. 99) 236 ITR 34 (SC) and Phool Chand Bairang Lal vs. ITO (1993) 113 CTR (SC) 436 : (1993) 203 IT 456 (SC) : AIR 1993SC 2390 relied 6.14 In similar facts and circumstances, in the case of Ankit Agrochem (P.)Ltd. Vs. Joint Commissioner of Income-tax, 1, Bikaner (2018] 89 taxmann.com 45 (Raiasthan), the Hon'ble Rajasthan High court has held that where the DIT company had received share application money from several entities, which were only ding bogus accommodation entries to beneficiary concerns, reassessment on basis of said information was justified. In this case all the entities from which the assessee had received share application money were only engaged in the business of providing ommodation entries of bogus nature, which was further confirmed by the directors, dummy directors/key persons of the above entities in their respective statements. The relevant portion of the said judgment is reproduced hereunder:- , a perusal of the reasons recorded by the 10 for issuing notice under Section 148 of the Act reveals that during the assessment proceedings for AY. 2014-15 it was noticed that the appellant assessee has received share 2.2 crore from 9 entities which was utilised during the year and subsequently 14. That apart, on further examination of certain information received from the Directorate of Investigation, Kolkata which had carried the igation in the case of the 9 entities, details whereof has been set out in the reasons recorded, it was ascertained that those 9 entities are the companies with no real business and are only engaged in business of providing accommodation ature to beneficiary concerns which was further confirmed by the directors/dummy directors/key persons of the said entities in their respective statements. Thus, on the basis of the material on record, A0 opined that the appellant company has received and application money received from bogus sources lacking genuineness, creditworthiness, genuine identity, which fall within the purview of Section 68 of the Act. 16. It is true that the reasons recorded or the material available on record m formed by the AO regarding the escapement of the income but then, while recording the reasons for belief formed, the AO is not required to finally ascertain the factum of escapement of the tax and it is sufficient t cause or justification to know or suppose that income had escaped assessment [vide Rajesh Jhaveri Stock Brockers (P.)Ltd.'s case (supra)l. It is also well settled the sufficiency and adequacy of the reasons which have led to formation of a belief by the Assessing Officer that the income has escaped the assessment cannot be examined by the court." 18.1 The Ld. CIT(A) has also relied on the decision of the Hon’ble Gujarat High Court in the case of taxmann.com 82 (Gujarat) and reproduced the relevant para of the said decision from page 16 to 26 of the impugned order extracted as under: “[7.2] From the reasons recorded and the affidavit in reply filed on behalf of the Revenue, it appears that after the assessment orders cameto be passed, the AO received the information from the PrincipalDirector of Income Tax (Investigation), Ahmedabad vide its ConfidentialLetter dated 16.06.2015 by which the Principal Director of Income Tax(Investigation), Ahmedabad forwar that a searchunder Section 132 of the IT Act was conducted in the case of one ShriPravin Kumar Jain and the search action resulted in collection of theevidence and other findings which conclusively proved that the said ShriPravin Kumar Jain was engaged in providing accommodation entries ofvarious natures like unsecured loans, bogus share application / capitaland bogus sales and purchases to the ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 Thus, on the basis of the material on record, A0 opined that the appellant company has received and utilised the share application money received from bogus sources lacking genuineness, creditworthiness, genuine identity, which fall within the purview of Section 68 of the Act. 16. It is true that the reasons recorded or the material available on record must have nexus to the subjective opinion formed by the AO regarding the escapement of the income but then, while recording the reasons for belief formed, the AO is not required to finally ascertain the factum of escapement of the tax and it is sufficient that the AO had cause or justification to know or suppose that income had escaped assessment [vide Rajesh Jhaveri Stock Brockers (P.)Ltd.'s case (supra)l. It is also well settled the sufficiency and adequacy of the reasons which have led to formation of elief by the Assessing Officer that the income has escaped the assessment cannot be examined by the court." The Ld. CIT(A) has also relied on the decision of the Hon’ble Gujarat High Court in the case of ‘Aaspas Multimedia Ltd. (Gujarat) and reproduced the relevant para of the said decision from page 16 to 26 of the impugned order [7.2] From the reasons recorded and the affidavit in reply filed on behalf of the Revenue, it appears that after the essment orders cameto be passed, the AO received the information from the PrincipalDirector of Income Tax (Investigation), Ahmedabad vide its ConfidentialLetter dated 16.06.2015 by which the Principal Director of Income Tax(Investigation), Ahmedabad forwarded the information that a searchunder Section 132 of the IT Act was conducted in the case of one ShriPravin Kumar Jain and the search action resulted in collection of theevidence and other findings which conclusively proved that the said ShriPravin Kumar Jain was engaged in providing accommodation entries ofvarious natures like unsecured loans, bogus share application / capitaland bogus sales and purchases to the Shri Narendra S Shah 35 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 Thus, on the basis of the material on record, A0 opined that utilised the share application money received from bogus sources lacking genuineness, creditworthiness, genuine identity, which fall 16. It is true that the reasons recorded or the material ust have nexus to the subjective opinion formed by the AO regarding the escapement of the income but then, while recording the reasons for belief formed, the AO is not required to finally ascertain the factum of hat the AO had cause or justification to know or suppose that income had escaped assessment [vide Rajesh Jhaveri Stock Brockers (P.)Ltd.'s case (supra)l. It is also well settled the sufficiency and adequacy of the reasons which have led to formation of elief by the Assessing Officer that the income has escaped the assessment cannot be examined by the court." The Ld. CIT(A) has also relied on the decision of the Hon’ble Aaspas Multimedia Ltd. DCIT 83 (Gujarat) and reproduced the relevant para of the said decision from page 16 to 26 of the impugned order, which is [7.2] From the reasons recorded and the affidavit in reply filed on behalf of the Revenue, it appears that after the essment orders cameto be passed, the AO received the information from the PrincipalDirector of Income Tax (Investigation), Ahmedabad vide its ConfidentialLetter dated 16.06.2015 by which the Principal Director of Income ded the information that a searchunder Section 132 of the IT Act was conducted in the case of one ShriPravin Kumar Jain and the search action resulted in collection of theevidence and other findings which conclusively proved that the said ShriPravin Kumar Jain was engaged in providing accommodation entries ofvarious natures like unsecured loans, bogus share application / capitaland bogus sales and purchases to the beneficiaries spread throughoutIndia. From the information received and the material received Director of Income Tax (Investigation), Ahmedabad, itis found that the assessee is one of the beneficiaries of bogus shareapplication from various bogus companies operated by the said ShriPravin Kumar Jain. Thus, the information received from the Office ofPrincipal Director of Income Tax (Investigation), Ahmedabad along withthe evidence collected during the search action in case of said ShriPravin Kumar Jain, the AO has reopened the assessments for AYs 201112and 201213.Therefore, was no tangiblematerial available with the AO to form an opinion that the incomechargeable to tax has escaped assessment for the years underconsideration. [7.3] Additionally, we may notice that the expression reason to believecame up for consideration before the Supreme Court in case of AssistantCommissioner of Income Tax vs. Rajesh Jhaveri Stock Brokers P. Ltd. inwhich, it was held that such expression cannot be read to mean that theAssessing Officer should have finally ascert conclusion. The term reason to believe would mean cause orjustification. If the Assessing Officer has cause or justification to know orsuppose that income had escaped assessment, it can be said to havereason to believe th income has escaped assessment. It wasobserved as under: “16. Section 147 authorises and permits the Assessing Officer toassess or reassess income chargeable to tax if he has reason to believethat income for any assessment year has escaped assessment. reason to believe would mean cause orjustification. If the Assessing Officer has cause or justification to knowor suppose that income had escaped assessment, it can be said tohave reason to believe that an income had escaped assessment. Theexpression cannot be read to mean that the Assessing Officer shouldhave finally ascertained the fact by legal evidence or conclusion. Thefunction of the Assessing Officer is to administer the statute withsolicitude for the public exchequer wi As observed by the Supreme Court in Central ProvincesManganese Ore Co. Ltd. v. ITO [1991 (191) ITR 662], for initiationof action under section 147(a) (as the ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 beneficiaries spread throughoutIndia. From the information received and the material received from theOffice of Principal Director of Income Tax (Investigation), Ahmedabad, itis found that the assessee is one of the beneficiaries of bogus shareapplication from various bogus companies operated by the said ShriPravin Kumar Jain. Thus, the information received from the Office ofPrincipal Director of Income Tax (Investigation), Ahmedabad along withthe evidence collected during the search action in case of said ShriPravin Kumar Jain, the AO has reopened the assessments for AYs 201112and 201213.Therefore, it cannot be said that there was no tangiblematerial available with the AO to form an opinion that the incomechargeable to tax has escaped assessment for the years underconsideration. [7.3] Additionally, we may notice that the expression reason came up for consideration before the Supreme Court in case of AssistantCommissioner of Income Tax vs. Rajesh Jhaveri Stock Brokers P. Ltd. inwhich, it was held that such expression cannot be read to mean that theAssessing Officer should have finally ascertained the fact by legalevidence or conclusion. The term reason to believe would mean cause justification. If the Assessing Officer has cause or justification to know orsuppose that income had escaped assessment, it can be said to havereason to believe th income has escaped assessment. It wasobserved as under: “16. Section 147 authorises and permits the Assessing Officer toassess or reassess income chargeable to tax if he has reason to believethat income for any assessment year has escaped assessment. Theword reason in the phrase reason to believe would mean cause orjustification. If the Assessing Officer has cause or justification to knowor suppose that income had escaped assessment, it can be said tohave reason to believe that an income had escaped ssessment. Theexpression cannot be read to mean that the Assessing Officer shouldhave finally ascertained the fact by legal evidence or conclusion. Thefunction of the Assessing Officer is to administer the statute withsolicitude for the public exchequer with an inbuilt idea of fairness totaxpayers. As observed by the Supreme Court in Central ProvincesManganese Ore Co. Ltd. v. ITO [1991 (191) ITR 662], for initiationof action under section 147(a) (as the Shri Narendra S Shah 36 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 beneficiaries spread throughoutIndia. From the information from theOffice of Principal Director of Income Tax (Investigation), Ahmedabad, itis found that the assessee is one of the beneficiaries of bogus shareapplication from various bogus companies operated by the said ShriPravin Kumar Jain. Thus, the information received from the Office ofPrincipal Director of Income Tax (Investigation), Ahmedabad along withthe evidence collected during the search action in case of said ShriPravin Kumar Jain, the AO has reopened the assessments for AYs it cannot be said that there was no tangiblematerial available with the AO to form an opinion that the incomechargeable to tax has escaped [7.3] Additionally, we may notice that the expression reason came up for consideration before the Supreme Court in case of AssistantCommissioner of Income Tax vs. Rajesh Jhaveri Stock Brokers P. Ltd. inwhich, it was held that such expression cannot be read to mean that theAssessing Officer ained the fact by legalevidence or conclusion. The term reason to believe would mean cause justification. If the Assessing Officer has cause or justification to know orsuppose that income had escaped assessment, it can be said to havereason to believe that an income has escaped assessment. It wasobserved as under: “16. Section 147 authorises and permits the Assessing Officer toassess or reassess income chargeable to tax if he has reason to believethat income for any assessment year Theword reason in the phrase reason to believe would mean cause orjustification. If the Assessing Officer has cause or justification to knowor suppose that income had escaped assessment, it can be said tohave reason to believe that an income had escaped ssessment. Theexpression cannot be read to mean that the Assessing Officer shouldhave finally ascertained the fact by legal evidence or conclusion. Thefunction of the Assessing Officer is to administer the statute withsolicitude for the th an inbuilt idea of fairness totaxpayers. As observed by the Supreme Court in Central ProvincesManganese Ore Co. Ltd. v. ITO [1991 (191) ITR 662], for initiationof action under section 147(a) (as the provision stood at the relevanttime) fulfillment of th requisite conditions in that regard isessential. At that stage, the final outcome of the proceeding is notrelevant. In other words, at the initiation stage, what is required isreason to believe, but not the established fact of escapement ofincome. At the stage of issue of notice, the only question is whetherthere was relevant material on which a reasonable person could haveformed a requisite belief. Whether the materials would conclusivelyprove the escapement is not the concern at that stage. This is belief by the Assessing Officer is within therealm of subjective satisfaction (see ITO v. Selected Dalurband CoalCo. Pvt. Ltd. [1996 (217) ITR 597 (SC)] ; Raymond Woollen MillsLtd. v. ITO [ 1999 (236) ITR 34 (SC)]. 7.4 Now, so fa the ground that the same is on the borrowed information and that AO has not formed an independent opinion and/or belief that the income chargeable to tax has escaped assessment, it is required to be noted that supplied by/from the office of Principal Director of Income Tax (Investigation), Ahmedahad, the AO has found that the petitioner - entries provided by one Shri Pravin Kumar Jain. having with him findings of the Investigating Team based on the material recovered during the search conducted of Shri Pravin Kumar Jain Group. Under the circumstances, it cannot be said that there was no tangible material available with the AO to prima facie form an opinion/belief that the income chargeable to tax has escaped assessment. The transactions of the assessee are required to be verified in detail on the basis of the material/evidence collected during the search of Shri Pravin Kumar Ja alleged to be the heneficiary of accommodation entries given by Shri Pravin Kumar Jain Group concerns, therefore, the same are required to be verified in detail. Under the circumstances and in the facts and circumstan case, it cannot be said that there is non on the part of the AO that while issuing the impugned notices under Section 148 of the IT Act. 7.5 Now, so far as the submission on behalf of the petitioner that as the transactions w ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 provision stood at the relevanttime) fulfillment of th requisite conditions in that regard isessential. At that stage, the final outcome of the proceeding is notrelevant. In other words, at the initiation stage, what is required isreason to believe, but not the established fact of escapement ofincome. the stage of issue of notice, the only question is whetherthere was relevant material on which a reasonable person could haveformed a requisite belief. Whether the materials would conclusivelyprove the escapement is not the concern at that stage. This is sobecause the formation of belief by the Assessing Officer is within therealm of subjective satisfaction (see ITO v. Selected Dalurband CoalCo. Pvt. Ltd. [1996 (217) ITR 597 (SC)] ; Raymond Woollen MillsLtd. v. ITO [ 1999 (236) ITR 34 (SC)]. 7.4 Now, so far as the challenge to the impugned notices on the ground that the same is on the borrowed information and that AO has not formed an independent opinion and/or belief that the income chargeable to tax has escaped assessment, it is required to be noted that on the basis of the information supplied by/from the office of Principal Director of Income Tax (Investigation), Ahmedahad, the AO has found that the assessee is the beneficiary of accommodation entries provided by one Shri Pravin Kumar Jain. The 40 was having with him findings of the Investigating Team based on the material recovered during the search conducted of Shri Pravin Kumar Jain Group. Under the circumstances, it cannot be said that there was no tangible material available with to prima facie form an opinion/belief that the income chargeable to tax has escaped assessment. The transactions of the assessee are required to be verified in detail on the basis of the material/evidence collected during the search of Shri Pravin Kumar Jain Group. The petitioner - assessee is alleged to be the heneficiary of accommodation entries given by Shri Pravin Kumar Jain Group concerns, therefore, the same are required to be verified in detail. Under the circumstances and in the facts and circumstan case, it cannot be said that there is non-application of mind on the part of the AO that while issuing the impugned notices under Section 148 of the IT Act. 7.5 Now, so far as the submission on behalf of the petitioner that as the transactions with respect to share applications by Shri Narendra S Shah 37 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 provision stood at the relevanttime) fulfillment of the two requisite conditions in that regard isessential. At that stage, the final outcome of the proceeding is notrelevant. In other words, at the initiation stage, what is required isreason to believe, but not the established fact of escapement ofincome. the stage of issue of notice, the only question is whetherthere was relevant material on which a reasonable person could haveformed a requisite belief. Whether the materials would conclusivelyprove the escapement is not the sobecause the formation of belief by the Assessing Officer is within therealm of subjective satisfaction (see ITO v. Selected Dalurband CoalCo. Pvt. Ltd. [1996 (217) ITR 597 (SC)] ; Raymond r as the challenge to the impugned notices on the ground that the same is on the borrowed information and that AO has not formed an independent opinion and/or belief that the income chargeable to tax has escaped assessment, on the basis of the information supplied by/from the office of Principal Director of Income Tax (Investigation), Ahmedahad, the AO has found that the assessee is the beneficiary of accommodation The 40 was having with him findings of the Investigating Team based on the material recovered during the search conducted of Shri Pravin Kumar Jain Group. Under the circumstances, it cannot be said that there was no tangible material available with to prima facie form an opinion/belief that the income chargeable to tax has escaped assessment. The transactions of the assessee are required to be verified in detail on the basis of the material/evidence collected during the search of assessee is alleged to be the heneficiary of accommodation entries given by Shri Pravin Kumar Jain Group concerns, therefore, the same are required to be verified in detail. Under the circumstances and in the facts and circumstances of the application of mind on the part of the AO that while issuing the impugned notices 7.5 Now, so far as the submission on behalf of the petitioner ith respect to share applications by 4 companies/shareholders named in the reasons recorded are concerned, the same were verified by the AO at the time of framing the original assessments and therefore, the reopening can be said to be on change of opinion subsequent AO is concerned, at the on as sutset it is required to be noted that as such there was no material lable with the A0 at the time of framing original assessments, which are now available with the AO received from the office of principal Director of Income Tax (Investigation), Ahmedabad. 7.6 At this stage, decision of the Division Bench of this Court in the case of Yogendrakumar Gupta v. TO /2014] 46 taxmann.com 56 is required to be referred to and considered. In the case before the Division information from CBI that loans accepted as genuine in original assessment were bogus, when the Assessing Officer initiated reassessment proceedings under Section 147 of the IT Act beyond 4 years, the Division Bench has observed that assumption of jurisdiction on the part of the A0 is based on fresh information, specific and reliable and otherwise sustainable under the law, challenge to reassessment proceedings warrant no interference and accordingly notice for reassessment was held t Division Bench. it was the case on behalf of the assessee that at the time of original scrutiny assessment, specific query was raised with regard to unsecured loans and advances received from the company B and these being transactions through the cheques and drafts, there would arise no question of the Assessing Officer not accepting such version of the assessee and not treating them as genuine loans and advances. The relevant observation of the Division Bench are in p has further observed that sufficiency of the reasons recorded by the Assessing Officer need not be gone into by this Court. It is further observed that the AO when forms his belief on the basis of subsequent new the income chargeable to tax has escaped assessment on account of omission on the part of the assessee to make full and true disclosure of primary facts, he may start reassessment proceedings as fresh facts revealed the non disclosure full and true. Such facts were not previously disclosed or it can be said that if previously disclosed, they expose untruthfulness of facts revealed. ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 4 companies/shareholders named in the reasons recorded are concerned, the same were verified by the AO at the time of framing the original assessments and therefore, the reopening can be said to be on change of opinion subsequent AO is concerned, at the on as sutset it is required to be noted that as such there was no material lable with the A0 at the time of framing original assessments, which are now available with the AO received from the office of rector of Income Tax (Investigation), Ahmedabad. 7.6 At this stage, decision of the Division Bench of this Court in the case of Yogendrakumar Gupta v. TO /2014] 46 taxmann.com 56 is required to be referred to and considered. In the case before the Division Bench on the basis of information from CBI that loans accepted as genuine in original assessment were bogus, when the Assessing Officer initiated reassessment proceedings under Section 147 of the IT Act beyond 4 years, the Division Bench has observed that assumption of jurisdiction on the part of the A0 is based on fresh information, specific and reliable and otherwise sustainable under the law, challenge to reassessment proceedings warrant no interference and accordingly notice for reassessment was held to be valid. In the case before the Division Bench. it was the case on behalf of the assessee that at the time of original scrutiny assessment, specific query was raised with regard to unsecured loans and advances received from the company B and these being transactions through the cheques and drafts, there would arise no question of the Assessing Officer not accepting such version of the assessee and not treating them as genuine loans and advances. The relevant observation of the Division Bench are in paras 6 to 18. In para 19, the Division Bench has further observed that sufficiency of the reasons recorded by the Assessing Officer need not be gone into by this Court. It is further observed that the AO when forms his belief on the basis of subsequent new and specific information that the income chargeable to tax has escaped assessment on account of omission on the part of the assessee to make full and true disclosure of primary facts, he may start reassessment proceedings as fresh facts revealed the non isclosure full and true. Such facts were not previously disclosed or it can be said that if previously disclosed, they expose untruthfulness of facts revealed. Shri Narendra S Shah 38 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 4 companies/shareholders named in the reasons recorded are concerned, the same were verified by the AO at the time of framing the original assessments and therefore, the reopening can be said to be on change of opinion by the subsequent AO is concerned, at the on as sutset it is required to be noted that as such there was no material lable with the A0 at the time of framing original assessments, which are now available with the AO received from the office of rector of Income Tax (Investigation), Ahmedabad. 7.6 At this stage, decision of the Division Bench of this Court in the case of Yogendrakumar Gupta v. TO /2014] 46 taxmann.com 56 is required to be referred to and considered. Bench on the basis of information from CBI that loans accepted as genuine in original assessment were bogus, when the Assessing Officer initiated reassessment proceedings under Section 147 of the IT Act beyond 4 years, the Division Bench has observed that assumption of jurisdiction on the part of the A0 is based on fresh information, specific and reliable and otherwise sustainable under the law, challenge to reassessment proceedings warrant no interference and accordingly notice o be valid. In the case before the Division Bench. it was the case on behalf of the assessee that at the time of original scrutiny assessment, specific query was raised with regard to unsecured loans and advances received from the company B and these being the transactions through the cheques and drafts, there would arise no question of the Assessing Officer not accepting such version of the assessee and not treating them as genuine loans and advances. The relevant observation of the Division aras 6 to 18. In para 19, the Division Bench has further observed that sufficiency of the reasons recorded by the Assessing Officer need not be gone into by this Court. It is further observed that the AO when forms his belief on and specific information that the income chargeable to tax has escaped assessment on account of omission on the part of the assessee to make full and true disclosure of primary facts, he may start reassessment proceedings as fresh facts revealed the non- isclosure full and true. Such facts were not previously disclosed or it can be said that if previously disclosed, they 7.6.1 The Apex Court in the case of Rajesh Jhaveri Stock Brokers (P.)Ltd. (supra) has held that of notice of reopening, the Assessing Officer must have a reason to believe and not the established fact of escapement of income in the following manner (headnote); "The expression reason to believe in section 147 would mean cause or justification. If the Assessing Officer has cause or If the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expressio Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. What is required is reason to believe but not the established fact of escapement of income. At the stage of issue of notice, the o there was relevant material on which a reasonable person could have formed a requisite belief. Whether the materials would conclusively prove the escapement is not the concern at that stage. This is so because the formation of belie within the realm of subjective satisfaction of the Assessing Officer." 7.6.2 In the case of Raymond Woollen Mills Ltd. v. ITO [19991 236IT 34 (SC), the Court held that in determining whether commencement of reassessment proceedings was valid, it has o some material on the basis of which the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at suchstage. 7.7 In the case of CIT v. Navodaya Castles ( 367 ITR306/50 taxmann.com 110/226 Taxman 190 (Mag.) (Delhi), Delhi High Court observed as under: "13. As we perceive, there are two sets of judgments and cases, but these judgments and cases proceed on their own facts. In one set of cases, documents/evidence to show and establish identity of the shareholders, bank account from which payment was made, the fact that payments were received thorough banking channels, filed necessary affidavits of the shareholders confirmations of the directors of the shareholder companies, ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 7.6.1 The Apex Court in the case of Rajesh Jhaveri Stock Brokers (P.)Ltd. (supra) has held that at the stage of issuance of notice of reopening, the Assessing Officer must have a reason to believe and not the established fact of escapement of income in the following manner (headnote); "The expression reason to believe in section 147 would mean or justification. If the Assessing Officer has cause or If the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. What is required is reason to believe but not the established fact of escapement of income. At the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief. Whether the materials would conclusively prove the escapement is not the concern at that stage. This is so because the formation of belie within the realm of subjective satisfaction of the Assessing 7.6.2 In the case of Raymond Woollen Mills Ltd. v. ITO [19991 236IT 34 (SC), the Court held that in determining whether commencement of reassessment proceedings was valid, it has only to be seen whether there was prima facie some material on the basis of which the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at suchstage. 7.7 In the case of CIT v. Navodaya Castles (P.) Ltd. [20141 367 ITR306/50 taxmann.com 110/226 Taxman 190 (Mag.) (Delhi), Delhi High Court observed as under: "13. As we perceive, there are two sets of judgments and cases, but these judgments and cases proceed on their own facts. In one set of cases, the assessee produced necessary documents/evidence to show and establish identity of the shareholders, bank account from which payment was made, the fact that payments were received thorough banking channels, filed necessary affidavits of the shareholders confirmations of the directors of the shareholder companies, Shri Narendra S Shah 39 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 7.6.1 The Apex Court in the case of Rajesh Jhaveri Stock at the stage of issuance of notice of reopening, the Assessing Officer must have a reason to believe and not the established fact of escapement "The expression reason to believe in section 147 would mean or justification. If the Assessing Officer has cause or If the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that an income had escaped n cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. What is required is reason to believe but not the established fact of escapement of income. nly question is whether there was relevant material on which a reasonable person could have formed a requisite belief. Whether the materials would conclusively prove the escapement is not the concern at that stage. This is so because the formation of belief is within the realm of subjective satisfaction of the Assessing 7.6.2 In the case of Raymond Woollen Mills Ltd. v. ITO [19991 236IT 34 (SC), the Court held that in determining whether commencement of reassessment proceedings was nly to be seen whether there was prima facie some material on the basis of which the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at suchstage. P.) Ltd. [20141 367 ITR306/50 taxmann.com 110/226 Taxman 190 (Mag.) "13. As we perceive, there are two sets of judgments and cases, but these judgments and cases proceed on their own the assessee produced necessary documents/evidence to show and establish identity of the shareholders, bank account from which payment was made, the fact that payments were received thorough banking channels, filed necessary affidavits of the shareholders or confirmations of the directors of the shareholder companies, but thereafter no further inquiries were conducted. The second set of cases are those where there was evidence and material to show that the shareholder company was only a paper company having substantial and huge investments in the form of share application money. The assessing officer has referred to the bank statement, financial position of the recipient aatia) and beneficiary assessee and surrounding circum primary requirements, which should be satisfied in such cases is, dentification of the creditors/shareholder, creditworthiness of creditors/shareholder and genuineness of the transaction. These three requirements have to be tested not superfic human probabilities and normal course of human conduct. 18. Lovely Exports Pvt. Ltd. (supra) was also considered and distinguished in N.R. Portfolio Pvt. Ltd. (supra) and it was held that the entire evidence availabl considered, after relying upon CIT v. Nipun Builders and Developers [20131 350 ITR 107 (Delhi), wherein it has been held that a reasonable approach has to be adopted and whether initial onus stands discharged would depend upon facts and circumstances of each case. In case of private limited companies, generally persons known to directors or shareholders, directly or indirectly, buy or subscribe to shares. Upon receipt of money, the share subscribers do not lose touch and become incommu dividends, warrants, etc. have to be sent and the relationship remains a continuing one. Therefore, an assessee cannot simply furnish some details and remain quiet when summons issued to shareholders remain un served and uncomplied. As improper to universally hold that the assessee cannot plead that they had received money, but could do nothing more and it was for the Assessing Officer to enforce shareholders attendance in spite of the fact that the sha missing and not available. Their reluctance and hiding may reflect on the genuineness of the transaction and creditworthiness of the creditor. It would be also incorrect to universally state that an Inspector must be sent to verify the shareholders/subscribers at the available addresses, though this might be required in some cases. Similarly, it would be incorrect to state that the Assessing Officer should ascertain ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 but thereafter no further inquiries were conducted. The second set of cases are those where there was evidence and material to show that the shareholder company was only a paper company having no source of income, but had made substantial and huge investments in the form of share application money. The assessing officer has referred to the bank statement, financial position of the recipient aatia) and beneficiary assessee and surrounding circumstances. The primary requirements, which should be satisfied in such cases is, dentification of the creditors/shareholder, creditworthiness of creditors/shareholder and genuineness of the transaction. These three requirements have to be tested not superficially but in depth having regard to the human probabilities and normal course of human conduct. 18. Lovely Exports Pvt. Ltd. (supra) was also considered and distinguished in N.R. Portfolio Pvt. Ltd. (supra) and it was held that the entire evidence available on record has to be considered, after relying upon CIT v. Nipun Builders and Developers [20131 350 ITR 107 (Delhi), wherein it has been held that a reasonable approach has to be adopted and whether initial onus stands discharged would depend upon nd circumstances of each case. In case of private limited companies, generally persons known to directors or shareholders, directly or indirectly, buy or subscribe to shares. Upon receipt of money, the share subscribers do not lose touch and become incommunicado. Call money, dividends, warrants, etc. have to be sent and the relationship remains a continuing one. Therefore, an assessee cannot simply furnish some details and remain quiet when summons issued to shareholders remain un served and uncomplied. As a general proposition, it would be improper to universally hold that the assessee cannot plead that they had received money, but could do nothing more and it was for the Assessing Officer to enforce shareholders attendance in spite of the fact that the shareholders were missing and not available. Their reluctance and hiding may reflect on the genuineness of the transaction and creditworthiness of the creditor. It would be also incorrect to universally state that an Inspector must be sent to verify the holders/subscribers at the available addresses, though this might be required in some cases. Similarly, it would be incorrect to state that the Assessing Officer should ascertain Shri Narendra S Shah 40 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 but thereafter no further inquiries were conducted. The second set of cases are those where there was evidence and material to show that the shareholder company was only a no source of income, but had made substantial and huge investments in the form of share application money. The assessing officer has referred to the bank statement, financial position of the recipient aatia) and stances. The primary requirements, which should be satisfied in such cases is, dentification of the creditors/shareholder, creditworthiness of creditors/shareholder and genuineness of the transaction. These three requirements have to be ially but in depth having regard to the human probabilities and normal course of human conduct. 18. Lovely Exports Pvt. Ltd. (supra) was also considered and distinguished in N.R. Portfolio Pvt. Ltd. (supra) and it was e on record has to be considered, after relying upon CIT v. Nipun Builders and Developers [20131 350 ITR 107 (Delhi), wherein it has been held that a reasonable approach has to be adopted and whether initial onus stands discharged would depend upon nd circumstances of each case. In case of private limited companies, generally persons known to directors or shareholders, directly or indirectly, buy or subscribe to shares. Upon receipt of money, the share subscribers do not nicado. Call money, dividends, warrants, etc. have to be sent and the relationship remains a continuing one. Therefore, an assessee cannot simply furnish some details and remain quiet when summons issued to shareholders remain un- a general proposition, it would be improper to universally hold that the assessee cannot plead that they had received money, but could do nothing more and it was for the Assessing Officer to enforce shareholders reholders were missing and not available. Their reluctance and hiding may reflect on the genuineness of the transaction and creditworthiness of the creditor. It would be also incorrect to universally state that an Inspector must be sent to verify the holders/subscribers at the available addresses, though this might be required in some cases. Similarly, it would be incorrect to state that the Assessing Officer should ascertain and get addresses from the Registrar of Companies website or search for the a Creditworthiness is not proved by showing issue and receipt of a cheque or by furnishing a copy of statement of bank account, when circumstances requires that there should be some more evidence of positive nature to sho subscribers had made genuine investment or had, acted as angel investors after due diligence or for personal reasons. The final conclusion must be pragmatic and practical, which takes into account holistic view of the entire evidence including the difficulties, which the assessee may face to unimpeachably establish creditworthiness of the shareholders." 7.8 Considering the aforesaid decisions of the Hon'ble Apex Court as well as decision of the Division Bench of this Court and Delhi High Court an the case on hand, it cannot he said that there was no material before the AO to reopen the assessment. In the present case also the reassessment proceedings have been initiated by the A0 on the basis of material provided Principal Director of Income Tax (Investigation), Ahmedabad. It is also required to be noted that the genuineness of the various companies who made share applications are doubted. The assessee is alleged to have been engaged in bogus share applicat Shri Pravin Kumar Jain. The assessee is the beneficiary of the said transactions of share application by those bogus concerns. In the wake of information received by the AO, when AO formed a belief that the inve funding of such companies which are bogus, the AO has rightly assumed the jurisdiction of initiating the reassessment proceedings. AO, on the basis of information subsequently having come to his knowledge, recognized untruthfulness of case, since both the necessary conditions to reopen the assessment have been duly fulfilled, sufficiency of the reasons is not to be gone into by this Court. Information furnished at the time of original assessme subsequent information received from the Principal Director of Income Tax (Investigation), Ahmedabad, itself found to be ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 and get addresses from the Registrar of Companies website or search for the addresses of shareholders themselves. Creditworthiness is not proved by showing issue and receipt of a cheque or by furnishing a copy of statement of bank account, when circumstances requires that there should be some more evidence of positive nature to sho subscribers had made genuine investment or had, acted as angel investors after due diligence or for personal reasons. The final conclusion must be pragmatic and practical, which takes into account holistic view of the entire evidence he difficulties, which the assessee may face to unimpeachably establish creditworthiness of the shareholders." 7.8 Considering the aforesaid decisions of the Hon'ble Apex Court as well as decision of the Division Bench of this Court and Delhi High Court and applying the same to the facts of the case on hand, it cannot he said that there was no material before the AO to reopen the assessment. In the present case also the reassessment proceedings have been initiated by the A0 on the basis of material provided Principal Director of Income Tax (Investigation), Ahmedabad. It is also required to be noted that the genuineness of the various companies who made share applications are The assessee is alleged to have been engaged in bogus share applications from various bogus concerns operated by Shri Pravin Kumar Jain. The assessee is the beneficiary of the said transactions of share application by those bogus concerns. In the wake of information received by the AO, when AO formed a belief that the investment made from the funding of such companies which are bogus, the AO has rightly assumed the jurisdiction of initiating the reassessment proceedings. AO, on the basis of information subsequently having come to his knowledge, recognized untruthfulness of the facts furnished earlier. In the present case, since both the necessary conditions to reopen the assessment have been duly fulfilled, sufficiency of the reasons is not to be gone into by this Court. Information furnished at the time of original assessment, when by subsequent information received from the Principal Director of Income Tax (Investigation), Ahmedabad, itself found to be Shri Narendra S Shah 41 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 and get addresses from the Registrar of Companies website ddresses of shareholders themselves. Creditworthiness is not proved by showing issue and receipt of a cheque or by furnishing a copy of statement of bank account, when circumstances requires that there should be some more evidence of positive nature to show that the subscribers had made genuine investment or had, acted as angel investors after due diligence or for personal reasons. The final conclusion must be pragmatic and practical, which takes into account holistic view of the entire evidence he difficulties, which the assessee may face to unimpeachably establish creditworthiness of the 7.8 Considering the aforesaid decisions of the Hon'ble Apex Court as well as decision of the Division Bench of this Court d applying the same to the facts of the case on hand, it cannot he said that there was no material before the AO to reopen the assessment. In the present case also the reassessment proceedings have been initiated by the A0 on the basis of material provided by the Principal Director of Income Tax (Investigation), Ahmedabad. It is also required to be noted that the genuineness of the various companies who made share applications are The assessee is alleged to have been engaged in bogus ions from various bogus concerns operated by Shri Pravin Kumar Jain. The assessee is the beneficiary of the said transactions of share application by those bogus concerns. In the wake of information received by the AO, stment made from the funding of such companies which are bogus, the AO has rightly assumed the jurisdiction of initiating the reassessment proceedings. AO, on the basis of information subsequently having come to his knowledge, recognized the facts furnished earlier. In the present case, since both the necessary conditions to reopen the assessment have been duly fulfilled, sufficiency of the reasons is not to be gone into by this Court. Information nt, when by subsequent information received from the Principal Director of Income Tax (Investigation), Ahmedabad, itself found to be controverted, the objection to the notice of reassessment under section 147 of the IT Act must fail. At this stage, para 20 of the decision in the case of Yogendrakumar Gupta (supra) is required to be referred to, which reads as under: "20. This Court has examined the belief of the Assessing Officer to a limited extent to inquiry as to whether there was sufficient material ava Officer to form a requisite belief whether there was a live link existing of the material and the income chargeable to tax that escaped assessment. This does not appear to be the case where the Assessing Officer on vague own belief in respect of such material. We need to notice that the Joint Director, CBI, Mumbai, intimated to the DIT (Investigation), Mumbai. A case is registered against Mr.Arun Dalmia, Harsh Dalmia and during the search at their residence and office premises, the substantial material indicated that 20 dummy companies of Mr.Arun Dalmia were engaged in money laundering and the income The said entities included Basant Marketing Pvt. Ltd. also. From the analysis of details reflected, which are spread across the country, the CIT, Kolkata, suspected the accommodation entry related to the assessment year 2006 provided to Director General of Income turn, communicated to the Chief Commissioner of Income Ahmedabad. Further revelation of investigation as could be noticed from the record examined (file) deserves no reflection in this petition. Insistence on the part of the petitioner to provide any further material forming the part of investigation carried out against Dalmias also needs to meet with negation, as the law requires supply of information on which Assessing Officer recorded her satisfaction, without necessitating supply of any proceedings initiated under section 147 of the Act would not be rendered void on non confidentiality is claimed at this stage, following the decision of the Delhi High Court in case of Acorus Unitec Ltd. (supra). Assumption of jurisdiction on the part of the Assessing Officer is since based on fresh information, specific and reliable and otherwise sustainable under the ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 controverted, the objection to the notice of reassessment under section 147 of the IT Act must fail. At this stage, para of the decision in the case of Yogendrakumar Gupta (supra) is required to be referred to, which reads as under: "20. This Court has examined the belief of the Assessing Officer to a limited extent to inquiry as to whether there was sufficient material available on record for the Assessing Officer to form a requisite belief whether there was a live link existing of the material and the income chargeable to tax that escaped assessment. This does not appear to be the case where the Assessing Officer on vague orbothering to form his own belief in respect of such material. We need to notice that the Joint Director, CBI, Mumbai, intimated to the DIT (Investigation), Mumbai. A case is registered against Mr.Arun Dalmia, Harsh Dalmia and during the search at their esidence and office premises, the substantial material indicated that 20 dummy companies of Mr.Arun Dalmia were engaged in money laundering and the income-tax evasion. The said entities included Basant Marketing Pvt. Ltd. also. From the analysis of details furnished and the beneficiaries reflected, which are spread across the country, the CIT, Kolkata, suspected the accommodation entry related to the assessment year 2006-07 as well, this information has been provided to Director General of Income-tax, Kolka turn, communicated to the Chief Commissioner of Income Ahmedabad. Further revelation of investigation as could be noticed from the record examined (file) deserves no reflection in this petition. Insistence on the part of the petitioner to rovide any further material forming the part of investigation carried out against Dalmias also needs to meet with negation, as the law requires supply of information on which Assessing Officer recorded her satisfaction, without necessitating supply of any specific documents. The proceedings initiated under section 147 of the Act would not be rendered void on non-supply of such document for which confidentiality is claimed at this stage, following the decision of the Delhi High Court in case of Acorus Unitech Wireless (P.) Ltd. (supra). Assumption of jurisdiction on the part of the Assessing Officer is since based on fresh information, specific and reliable and otherwise sustainable under the Shri Narendra S Shah 42 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 controverted, the objection to the notice of reassessment under section 147 of the IT Act must fail. At this stage, para of the decision in the case of Yogendrakumar Gupta (supra) is required to be referred to, which reads as under: "20. This Court has examined the belief of the Assessing Officer to a limited extent to inquiry as to whether there was ilable on record for the Assessing Officer to form a requisite belief whether there was a live link existing of the material and the income chargeable to tax that escaped assessment. This does not appear to be the case orbothering to form his own belief in respect of such material. We need to notice that the Joint Director, CBI, Mumbai, intimated to the DIT (Investigation), Mumbai. A case is registered against Mr.Arun Dalmia, Harsh Dalmia and during the search at their esidence and office premises, the substantial material indicated that 20 dummy companies of Mr.Arun Dalmia were tax evasion. The said entities included Basant Marketing Pvt. Ltd. also. furnished and the beneficiaries reflected, which are spread across the country, the CIT, Kolkata, suspected the accommodation entry related to the 07 as well, this information has been tax, Kolkata, who in turn, communicated to the Chief Commissioner of Income-tax, Ahmedabad. Further revelation of investigation as could be noticed from the record examined (file) deserves no reflection in this petition. Insistence on the part of the petitioner to rovide any further material forming the part of investigation carried out against Dalmias also needs to meet with negation, as the law requires supply of information on which Assessing Officer recorded her satisfaction, without specific documents. The proceedings initiated under section 147 of the Act would not supply of such document for which confidentiality is claimed at this stage, following the decision h Wireless (P.) Ltd. (supra). Assumption of jurisdiction on the part of the Assessing Officer is since based on fresh information, specific and reliable and otherwise sustainable under the law, challenge to reassessment proceedings warrant no interference. 7.9 In view of the aforesaid facts and circumstances of the case, the decisions of the Hon'ble Supreme Court in the case of LakhmaniMewal Das (supra); the decision of the Delhi High Court in the case of JSRS Udyog Ltd. (supra); Replika Press (P.) Ltd. (s case of SarlaRajkumarVerma (supra) shall not be applicable to the facts of the case on hand. In the facts and circumstances of the case, it cannot be said that the reopening of the assessment is on change of opin subsequent AO. 7.10 Now, so far as the submission on behalf of the assessee that the statement of Shri Pravin Kumar Jain, which was recorded at the time of search and which is the basis for reopening of the assessments in the years under consideration, was subsequently retracted and therefore, the reopening of the assessment on such a retracted statement cannot be sustained is concerned, at the outset it is required to he noted that from the reasons recorded it cannot be said that the reopening i Pravin Kumar Jain, which is subsequently retracted. From the reasons recorded it appears that the office of the Principal Director of Income Tax (Investigation), Ahmedabad sent the material/evidence collected durin Shri Pravin Kumar Jain and after considering and verifying the same and having been found that the petitioner assessee is the beneficiary of the accommodation entries by way of share application from various bogus companies operated by Sh impugned notices under Section 148 of the IT Act are issued and the assessments for the AYs 2011 reopened. Even otherwise what will be the effect of the retracted statement of Shri Pravin Kumar J decided and/or considered at the time of reassessment proceedings. 7.11 Now, so far as the reliance placed upon the decision of the Delhi High Court in the case of Signature Hotels (P) Ltd. ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 law, challenge to reassessment proceedings warrant no interference." 7.9 In view of the aforesaid facts and circumstances of the case, the decisions of the Hon'ble Supreme Court in the case of LakhmaniMewal Das (supra); the decision of the Delhi High Court in the case of JSRS Udyog Ltd. (supra); Replika Press (P.) Ltd. (supra) and the decision of this Court in the case of SarlaRajkumarVerma (supra) shall not be applicable to the facts of the case on hand. In the facts and circumstances of the case, it cannot be said that the reopening of the assessment is on change of opin subsequent AO. 7.10 Now, so far as the submission on behalf of the assessee that the statement of Shri Pravin Kumar Jain, which was recorded at the time of search and which is the basis for reopening of the assessments in the years under ration, was subsequently retracted and therefore, the reopening of the assessment on such a retracted statement cannot be sustained is concerned, at the outset it is required to he noted that from the reasons recorded it cannot be said that the reopening is solely based upon the statement of Shri Pravin Kumar Jain, which is subsequently retracted. From the reasons recorded it appears that the office of the Principal Director of Income Tax (Investigation), Ahmedabad sent the material/evidence collected during the search of Shri Pravin Kumar Jain and after considering and verifying the same and having been found that the petitioner assessee is the beneficiary of the accommodation entries by way of share application from various bogus companies operated by Shri Pravin Kumar Jain, only thereafter the impugned notices under Section 148 of the IT Act are issued and the assessments for the AYs 2011-12 and 2012 Even otherwise what will be the effect of the retracted statement of Shri Pravin Kumar Jain is required to be decided and/or considered at the time of reassessment proceedings. 7.11 Now, so far as the reliance placed upon the decision of the Delhi High Court in the case of Signature Hotels (P) Ltd. Shri Narendra S Shah 43 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 law, challenge to reassessment proceedings warrant no 7.9 In view of the aforesaid facts and circumstances of the case, the decisions of the Hon'ble Supreme Court in the case of LakhmaniMewal Das (supra); the decision of the Delhi High Court in the case of JSRS Udyog Ltd. (supra); Replika upra) and the decision of this Court in the case of SarlaRajkumarVerma (supra) shall not be applicable to the facts of the case on hand. In the facts and circumstances of the case, it cannot be said that the reopening of the assessment is on change of opinion by the 7.10 Now, so far as the submission on behalf of the assessee that the statement of Shri Pravin Kumar Jain, which was recorded at the time of search and which is the basis for reopening of the assessments in the years under ration, was subsequently retracted and therefore, the reopening of the assessment on such a retracted statement cannot be sustained is concerned, at the outset it is required to he noted that from the reasons recorded it cannot be said s solely based upon the statement of Shri Pravin Kumar Jain, which is subsequently retracted. From the reasons recorded it appears that the office of the Principal Director of Income Tax (Investigation), Ahmedabad g the search of Shri Pravin Kumar Jain and after considering and verifying the same and having been found that the petitioner - assessee is the beneficiary of the accommodation entries by way of share application from various bogus companies ri Pravin Kumar Jain, only thereafter the impugned notices under Section 148 of the IT Act are issued 12 and 2012-13 are Even otherwise what will be the effect of the retracted ain is required to be decided and/or considered at the time of reassessment 7.11 Now, so far as the reliance placed upon the decision of the Delhi High Court in the case of Signature Hotels (P) Ltd. (supra) by the learned Counsel appearing on assessee is concerned, on considering the facts in the said decision, we are of the opinion that the said decision shall not be applicable to the facts of the case on hand. In the present case on the basis of the information received from the office of Principal Director of Income Tax (Investigation), Ahmedabad along with the evidence collected during the search and other findings, the AO has considered the same and after verifying and considering the material on record it has been found by th beneficiary of the accommodation entries/bogus share application from various bogus companies operated by Shri Pravin Kumar Jain. In the affidavit in reply the Revenue has stated in para 3.8 as under: The allegation of assessee was reopened based on correct facts/law and procedural galisrequirements of the Act were duly complied with. The information bravided by The Pr. Director of Income Tax (Investigation), Ahmedabad vide c No.PDIT(Inv)/AHD/Pravin Jain/15 was thro roughly perused. The same has been summarized in the reasons for reopening recorded prior 10 issuance of section 148 notice. From the same, reason to believe that income has e logically derived. Thus, only after deriving requisite satisfaction regarding escapement of income on basis of information/material supplied by the Pr. Director of Income Tax (Investigation), Ahmedabad, reopening The same is evident from reasons provided for reopening. Information received from third party, more so the information collected by Investigation Wing as a consequence of search us. 132 of the Act constitutes sufficient material for reopening, if, Assessing Officer after perusing the said information arrives at conclusion that income has escaped assessment. This is precisely the case in present situation. Thus, all the allegations made by the petitioner are incorrect in this case. In this re investigation wing are based on an the material recovered during search conducted on Shri Pravin Kumar Jain group on 01.10.2013 in Mumbai. The same was sympathetically decoded and corroborated by evidence seized d search. The details regarding modus of recording ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 (supra) by the learned Counsel appearing on behalf of the assessee is concerned, on considering the facts in the said decision, we are of the opinion that the said decision shall not be applicable to the facts of the case on hand. In the present case on the basis of the information received from office of Principal Director of Income Tax (Investigation), Ahmedabad along with the evidence collected during the search and other findings, the AO has considered the same and after verifying and considering the material on record it has been found by the AO that the present assessee is the beneficiary of the accommodation entries/bogus share application from various bogus companies operated by Shri Pravin Kumar Jain. In the affidavit in reply the Revenue has stated in para 3.8 as under: The allegation of the assessee is not correct. The case of the assessee was reopened based on correct facts/law and procedural galisrequirements of the Act were duly complied with. The information bravided by The Pr. Director of Income Tax (Investigation), Ahmedabad vide confidential letter No.PDIT(Inv)/AHD/Pravin Jain/15-16 dated 16.06.2015, was thro roughly perused. The same has been summarized in the reasons for reopening recorded prior 10 issuance of section 148 notice. From the same, reason to believe that income has escaped assessment in concerned AY has been logically derived. Thus, only after deriving requisite satisfaction regarding escapement of income on basis of information/material supplied by the Pr. Director of Income Tax (Investigation), Ahmedabad, reopening was initiated. The same is evident from reasons provided for reopening. Information received from third party, more so the information collected by Investigation Wing as a consequence of search us. 132 of the Act constitutes sufficient material for ng, if, Assessing Officer after perusing the said information arrives at conclusion that income has escaped assessment. This is precisely the case in present situation. Thus, all the allegations made by the petitioner are incorrect in this case. In this regard il is stated that the findings of the investigation wing are based on an the material recovered during search conducted on Shri Pravin Kumar Jain group on 01.10.2013 in Mumbai. The same was sympathetically decoded and corroborated by evidence seized d search. The details regarding modus of recording Shri Narendra S Shah 44 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 behalf of the assessee is concerned, on considering the facts in the said decision, we are of the opinion that the said decision shall not be applicable to the facts of the case on hand. In the present case on the basis of the information received from office of Principal Director of Income Tax (Investigation), Ahmedabad along with the evidence collected during the search and other findings, the AO has considered the same and after verifying and considering the material on record it e AO that the present assessee is the beneficiary of the accommodation entries/bogus share application from various bogus companies operated by Shri Pravin Kumar Jain. In the affidavit in reply the Revenue has the assessee is not correct. The case of the assessee was reopened based on correct facts/law and procedural galisrequirements of the Act were duly complied with. The information bravided by The Pr. Director of Income onfidential letter 16 dated 16.06.2015, was thro roughly perused. The same has been summarized in the reasons for reopening recorded prior 10 issuance of section 148 notice. From the same, reason to believe that scaped assessment in concerned AY has been logically derived. Thus, only after deriving requisite satisfaction regarding escapement of income on basis of information/material supplied by the Pr. Director of Income was initiated. The same is evident from reasons provided for reopening. Information received from third party, more so the information collected by Investigation Wing as a consequence of search us. 132 of the Act constitutes sufficient material for ng, if, Assessing Officer after perusing the said information arrives at conclusion that income has escaped assessment. This is precisely the case in present situation. Thus, all the allegations made by the petitioner are incorrect gard il is stated that the findings of the investigation wing are based on an the material recovered during search conducted on Shri Pravin Kumar Jain group on 01.10.2013 in Mumbai. The same was sympathetically decoded and corroborated by evidence seized during the search. The details regarding modus of recording transactions has been described in detail by the Investigation wing. The relevant part of the same with findings of Investigation Wing was summarized in reasons recorded. It was found by the Invest Kumar Jain group was engaged in business of providing accommodation entries through its concerns like Anchal PropertiesP. Ltd., Ansh Merchandise P. Ltd., Olive Overseas P. Ltd., Vanguard Jewels Ltd. etc.It was found that there are bogus transactions to/from account of Anchal Properties P. Ltd., Ansh Merchandise P. Ltd., Olive OverseasP. Ltd., Vanguard Jewels Ltd., to the account of the assessee company. On basis of corroborative evidence and systematic investigation, Investigation W such transactions of accommodation entry given by certain Pravin Kumar Jain group concerns such as Anchal Properties P. Ltd., Ansh Merchandise P. Ltd., Olive Overseas P. Ltd., Vanguard Jewels Ltd. are accompanied with bogus transactions by the corresponding other party or the beneficiary i.e.Aaspaas Multimedia Ltd. in the present case. At this stage, information collected by Investigation Wing as a consequence of search us.132 of the Act constituted sufficient material for r Stock Brokers (P)Ltd. [20071 161 Taxman 316 (SC), it has been held that "if the Assessing Officer has cause or jurisdiction to know or suppose that income has escaped assessment, it can be said to have "reasons to believe an income has escaped assessment. The said expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or inclusion. The function of the Assessing Officer is to administer the statute with exchequer with an in view of these facts, it is most humbly submitted that the allegation or arguments raised by the petitioner are incorrect.' Considering the aforesaid facts and circumstan it cannot be said that the impugned notices under Section 148 of the IT Act and the impugned reassessment proceedings are bad in law. 7.12 At this stage it is required to be noted that with respect to another asssessee (supra) in whose case also on the basis of such information received from the office of Principal Director of Income Tax ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 transactions has been described in detail by the Investigation wing. The relevant part of the same with findings of Investigation Wing was summarized in reasons recorded. It was found by the Investigation wing that Pravin Kumar Jain group was engaged in business of providing accommodation entries through its concerns like Anchal PropertiesP. Ltd., Ansh Merchandise P. Ltd., Olive Overseas P. Ltd., Vanguard Jewels Ltd. etc.It was found that there are bogus transactions to/from account of Anchal Properties P. Ltd., Ansh Merchandise P. Ltd., Olive OverseasP. Ltd., Vanguard Jewels Ltd., to the account of the assessee company. On basis of corroborative evidence and systematic investigation, Investigation Wing has given a finding that all such transactions of accommodation entry given by certain Pravin Kumar Jain group concerns such as Anchal Properties P. Ltd., Ansh Merchandise P. Ltd., Olive Overseas P. Ltd., Vanguard Jewels Ltd. are accompanied with bogus transactions by the corresponding other party or the beneficiary i.e.Aaspaas Multimedia Ltd. in the present case. At this stage, information collected by Investigation Wing as a consequence of search us.132 of the Act constituted sufficient material for reopening. In CIT v. Rajesh Jhaveri Stock Brokers (P)Ltd. [20071 161 Taxman 316 (SC), it has been held that "if the Assessing Officer has cause or jurisdiction to know or suppose that income has escaped assessment, it can be said to have "reasons to believe an income has escaped assessment. The said expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or inclusion. The function of the Assessing Officer is to administer the statute with solicitude for the public exchequer with an in-built idea of fairness to taxpayer". In view of these facts, it is most humbly submitted that the allegation or arguments raised by the petitioner are incorrect.' Considering the aforesaid facts and circumstan it cannot be said that the impugned notices under Section 148 of the IT Act and the impugned reassessment proceedings are bad in law. 7.12 At this stage it is required to be noted that with respect to another asssessee - Ankit Financial Services Ltd.'s (supra) in whose case also on the basis of such information received from the office of Principal Director of Income Tax Shri Narendra S Shah 45 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 transactions has been described in detail by the Investigation wing. The relevant part of the same with findings of Investigation Wing was summarized in reasons igation wing that Pravin Kumar Jain group was engaged in business of providing accommodation entries through its concerns like Anchal PropertiesP. Ltd., Ansh Merchandise P. Ltd., Olive Overseas P. Ltd., Vanguard Jewels Ltd. etc.It was found that there are bogus transactions to/from account of Anchal Properties P. Ltd., Ansh Merchandise P. Ltd., Olive OverseasP. Ltd., Vanguard Jewels Ltd., to the account of the assessee company. On basis of corroborative evidence and systematic ing has given a finding that all such transactions of accommodation entry given by certain Pravin Kumar Jain group concerns such as Anchal Properties P. Ltd., Ansh Merchandise P. Ltd., Olive Overseas P. Ltd., Vanguard Jewels Ltd. are accompanied with bogus transactions by the corresponding other party or the beneficiary i.e.Aaspaas Multimedia Ltd. in the present case. At this stage, information collected by Investigation Wing as a consequence of search us.132 of the Act constituted eopening. In CIT v. Rajesh Jhaveri Stock Brokers (P)Ltd. [20071 161 Taxman 316 (SC), it has been held that "if the Assessing Officer has cause or jurisdiction to know or suppose that income has escaped assessment, it can be said to have "reasons to believe" that an income has escaped assessment. The said expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or inclusion. The function of the Assessing Officer is to solicitude for the public built idea of fairness to taxpayer". In view of these facts, it is most humbly submitted that the allegation or arguments raised by the petitioner are incorrect.' Considering the aforesaid facts and circumstances it cannot be said that the impugned notices under Section 148 of the IT Act and the impugned reassessment 7.12 At this stage it is required to be noted that with respect Ankit Financial Services Ltd.'s case (supra) in whose case also on the basis of such information received from the office of Principal Director of Income Tax (Investigation), Ahmedabad and with similar allegation of beneficiary of the accommodation entries/share application from the bog Jain when the assessment for AY2010 reopened and when the same was challenged before this Court, the Division Bench of this Court vide judgment and order dated 29.12.2016 in Ankit Financial Ser case (supra) has dismissed the said petition. 8. In view of the above and for the reasons stated above, it cannot be said that the impugned notices under Section 148 of the IT Act are without jurisdiction and/or contrary to section 147 of the circumstances, both the petitions deserve to be dismissed and are, accordingly, dismissed. Notice is discharged. Ad interim relief, if any, stan 18.2 The Ld. CIT(A) als Gujarat High Court in the case of Ankit Financial Services Ltd. v. 78 taxmann.com 58 (Gujarat), Piece Industrial Engineers Pvt. Ltd. v. DCIT 73 taxmann.com 185 and Bright Stars Pvt. Ltd. v. ITO 71 taxmann.com 64 (Bombay). The relevant p reproduced is extracted as under: “6.16 In the case of Ankit Financial Services Ltd. Vs. Deputy Commissioner of Income taxmann.com 58 (Gujarat), the Hon'ble has held that where material anotherperson indicated that assessee had received bogus share applications through accommodation entries, since assessee was beneficiary, initiation of re justified. 6.17 It has been held by the Hon'ble Gujarat High Cou the case ofPeass industrial Engineers (P.) Ltd. Vs. Deputy Commissioner of Income (Gujarat) that where the Assessing Officer received information from Investigation wing that two well entry operators of country ha ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 (Investigation), Ahmedabad and with similar allegation of beneficiary of the accommodation entries/share application from the bogus companies operated by Shri Pravin Kumar Jain when the assessment for AY2010-11 was sought to be reopened and when the same was challenged before this Court, the Division Bench of this Court vide judgment and order dated 29.12.2016 in Ankit Financial Ser case (supra) has dismissed the said petition. 8. In view of the above and for the reasons stated above, it cannot be said that the impugned notices under Section 148 of the IT Act are without jurisdiction and/or contrary to section 147 of the IT Act and/or bad in law. Under the circumstances, both the petitions deserve to be dismissed and are, accordingly, dismissed. Notice is discharged. Ad interim relief, if any, stands vacated forthwith. No costs. The Ld. CIT(A) also relied on the decision of the Hon’ble Gujarat High Court in the case of Ankit Financial Services Ltd. v. 78 taxmann.com 58 (Gujarat), Piece Industrial Engineers Pvt. Ltd. v. DCIT 73 taxmann.com 185 and Bright Stars Pvt. Ltd. v. ITO 71 taxmann.com 64 (Bombay). The relevant para of the decisions s extracted as under: 6.16 In the case of Ankit Financial Services Ltd. Vs. Deputy Commissioner of Income-tax, Circle 1(1)(2) [2017] 78 taxmann.com 58 (Gujarat), the Hon'ble Gujarat High has held that where material recovered in search of anotherperson indicated that assessee had received bogus share applications through accommodation entries, since assessee was beneficiary, initiation of re-opening. was 6.17 It has been held by the Hon'ble Gujarat High Cou the case ofPeass industrial Engineers (P.) Ltd. Vs. Deputy Commissioner of Income-tax, [2016] 73 taxmann.com 185 (Gujarat) that where the Assessing Officer received information from Investigation wing that two well entry operators of country have provided bogus entries to Shri Narendra S Shah 46 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 (Investigation), Ahmedabad and with similar allegation of beneficiary of the accommodation entries/share application us companies operated by Shri Pravin Kumar 11 was sought to be reopened and when the same was challenged before this Court, the Division Bench of this Court vide judgment and order dated 29.12.2016 in Ankit Financial Services Ltd.'s 8. In view of the above and for the reasons stated above, it cannot be said that the impugned notices under Section 148 of the IT Act are without jurisdiction and/or contrary to IT Act and/or bad in law. Under the circumstances, both the petitions deserve to be dismissed and are, accordingly, dismissed. Notice is discharged. Ad- ds vacated forthwith. No costs.” sion of the Hon’ble Gujarat High Court in the case of Ankit Financial Services Ltd. v. 78 taxmann.com 58 (Gujarat), Piece Industrial Engineers Pvt. Ltd. v. DCIT 73 taxmann.com 185 and Bright Stars Pvt. Ltd. v. ITO 71 ara of the decisions 6.16 In the case of Ankit Financial Services Ltd. Vs. Deputy tax, Circle 1(1)(2) [2017] 78 Gujarat High Court recovered in search of anotherperson indicated that assessee had received bogus share applications through accommodation entries, since opening. was 6.17 It has been held by the Hon'ble Gujarat High Court in the case ofPeass industrial Engineers (P.) Ltd. Vs. Deputy tax, [2016] 73 taxmann.com 185 (Gujarat) that where the Assessing Officer received information from Investigation wing that two well-known ve provided bogus entries to various beneficiaries, and assessee was one of such beneficiary, Assessing Officer was justified in reopening assessment. 6.18 In the case of Bright Star Syntex (P.) Ltd. Vs.Income Officer 9(2)(1) in Writ Petition (L) No. 4 taxmann.com 64 (Bombay), the Hon'ble Bombay High Court has held that where on basis of evidences collected and statement recorded during course of search of entry provider, Assessing Officer had reason to believe that unsecured loans received by assessee from certain persons escaped assessment, it could not be said that there was change of opinion. The relevant head notes of the said judgment are as under:- "Section 68, read with sections 147 and 143, of the Income tax Act,1961 Assessment year2012 seizure action of P Group, an entry provider, Assessing Officer opined that certain creditors of assessee were entities operated by P Group and, therefore, amount credite assessee's account as unsecured loans was, in fact, income that had escaped assessment and, thus, had to be taxed under section 147 entities operated by P Group from whom assessee had received loans and advanc during scrutiny assessment proceedings and assessment order was passed under section 143(3) on basis of evidences furnished by assessee, and that mere statement/confession by entry provider would not by itself establish tha were being non collected and statement recorded during course of search of entry provider, Assessing Officer had reason to believe that unsecured loans received from certain persons escaped assessment durin so as to initiate reassessment under section 147/148; it could not be said that there was change of opinion yes [In favour of revenue]" 6.19 In view of the above binding judicial precedents, I am of the considered view that the AC had valid reasons to initiate the reassessment proceedings, which were duly recorded and communicated to the appellant. Thus, the A.0. has ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 various beneficiaries, and assessee was one of such beneficiary, Assessing Officer was justified in reopening assessment. 6.18 In the case of Bright Star Syntex (P.) Ltd. Vs.Income Officer 9(2)(1) in Writ Petition (L) No. 430 of 2016,[2016] 71 taxmann.com 64 (Bombay), the Hon'ble Bombay High Court has held that where on basis of evidences collected and statement recorded during course of search of entry provider, Assessing Officer had reason to believe that unsecured loans eceived by assessee from certain persons escaped assessment, it could not be said that there was change of opinion. The relevant head notes of the said judgment are as "Section 68, read with sections 147 and 143, of the Income tax Act,1961 - Cash credit (Loans by entry provider) Assessment year2012-13 - On the basis of search and seizure action of P Group, an entry provider, Assessing Officer opined that certain creditors of assessee were entities operated by P Group and, therefore, amount credite assessee's account as unsecured loans was, in fact, income that had escaped assessment and, thus, had to be taxed under section 147 - He discarded assessee's contention that entities operated by P Group from whom assessee had received loans and advances was subject matter of inquiry during scrutiny assessment proceedings and assessment order was passed under section 143(3) on basis of evidences furnished by assessee, and that mere statement/confession by entry provider would not by itself establish tha were being non-genuine - Whether on basis of evidences collected and statement recorded during course of search of entry provider, Assessing Officer had reason to believe that unsecured loans received from certain persons escaped assessment during original assessment under section 143(3) so as to initiate reassessment under section 147/148; it could not be said that there was change of opinion yes [In favour of revenue]" 6.19 In view of the above binding judicial precedents, I am of nsidered view that the AC had valid reasons to initiate the reassessment proceedings, which were duly recorded and communicated to the appellant. Thus, the A.0. has Shri Narendra S Shah 47 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 various beneficiaries, and assessee was one of such beneficiary, Assessing Officer was justified in reopening 6.18 In the case of Bright Star Syntex (P.) Ltd. Vs.Income-tax 30 of 2016,[2016] 71 taxmann.com 64 (Bombay), the Hon'ble Bombay High Court has held that where on basis of evidences collected and statement recorded during course of search of entry provider, Assessing Officer had reason to believe that unsecured loans eceived by assessee from certain persons escaped assessment, it could not be said that there was change of opinion. The relevant head notes of the said judgment are as "Section 68, read with sections 147 and 143, of the Income- redit (Loans by entry provider) - On the basis of search and seizure action of P Group, an entry provider, Assessing Officer opined that certain creditors of assessee were entities operated by P Group and, therefore, amount credited to assessee's account as unsecured loans was, in fact, income that had escaped assessment and, thus, had to be taxed He discarded assessee's contention that entities operated by P Group from whom assessee had es was subject matter of inquiry during scrutiny assessment proceedings and assessment order was passed under section 143(3) on basis of evidences furnished by assessee, and that mere statement/confession by entry provider would not by itself establish that credits Whether on basis of evidences collected and statement recorded during course of search of entry provider, Assessing Officer had reason to believe that unsecured loans received from certain persons escaped g original assessment under section 143(3) so as to initiate reassessment under section 147/148; it could not be said that there was change of opinion - Held, 6.19 In view of the above binding judicial precedents, I am of nsidered view that the AC had valid reasons to initiate the reassessment proceedings, which were duly recorded and communicated to the appellant. Thus, the A.0. has rightly assumed jurisdiction and correctly initiated proceedings W/s 148 of the Act. Accord Appeal No. 1 of the present appeal is dismissed. 19. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. In the case, the Assessing Officer has reopened the assessment aft reasons to believe that income escaped assessment reproduced by the Assessing Officer in para 2 of the assessment order. For ready reference reproduced as under: “2. The reason for reopening in th under: "An information has been received from ITO Ward 32(3)(2), Mumbai vide letterNo. ITO32(3)(2)/Information /2018 dated 14.02.2019 that the bank statement of M/s KalpanikVyapaar Pvt Ltd (AADCK3638E) with ICICI Bank Ltd. (A/c no 2013-14 reveals payment to Shri Narendra Shah on various dates for the 1.4.2013 to 18.02.2014 amounting to Rs.4,14,00,000/ address 32, Ezra Street, 5 a shell company by SEBIEnquiries have revealed that M/s KalpanikVyapar Pvt. Ltd. has been removed/ struck off from the repister of Companies by the Registrar of Companies, Kolkota and the directors of the said company have also been declared as Dis 164(2)(a) of the Companies Act. It is pertinent to mention that the assessee is one of the Directors of the said company declared disqualified director by ROC. Kolkata, On verification of the assessees b Bank Ltd. (OD AC 0156), it is seen that the total credits from M/s KalpanikVyapaar Ltd during the F Y 2013: 14 amount to Rs,5,23,00,000/ As per the details available for A.Y 2015 16, a total amount of R unsecured loan from ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 rightly assumed jurisdiction and correctly initiated proceedings W/s 148 of the Act. Accordingly, the Ground of Appeal No. 1 of the present appeal is dismissed.” We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. In the case, the Assessing Officer has reopened the assessment aft ve that income escaped assessment, which has been reproduced by the Assessing Officer in para 2 of the assessment order. For ready reference, the said reasons recorded are reproduced as under: 2. The reason for reopening in the case was recorded as "An information has been received from ITO Ward 32(3)(2), Mumbai vide letterNo. ITO32(3)(2)/Information /2018 dated 14.02.2019 that the bank statement of M/s KalpanikVyapaar Pvt Ltd (AADCK3638E) with ICICI Bank Ltd. (A/c no 003505500471), Dahisar Branch for the F.Y 14 reveals payment to Shri Narendra Shah on various dates for the 1.4.2013 to 18.02.2014 amounting to Rs.4,14,00,000/- M/s KalpanikVyapaar Pvt. Ltd having address 32, Ezra Street, 5 th Floor, Kolkata has been d a shell company by SEBIEnquiries have revealed that M/s KalpanikVyapar Pvt. Ltd. has been removed/ struck off from the repister of Companies by the Registrar of Companies, Kolkota and the directors of the said company have also been declared as Disqualified Directors under section 164(2)(a) of the Companies Act. It is pertinent to mention that the assessee is one of the Directors of the said company declared disqualified director by ROC. Kolkata, On verification of the assessees bank statement with d. (OD AC 0156), it is seen that the total credits from M/s KalpanikVyapaar Ltd during the F Y 2013: 14 amount to Rs,5,23,00,000/ As per the details available for A.Y 2015 16, a total amount of Rs.13,33,21,520/- appears as unsecured loan from MsKalpanikVyapaar Put. Ltd. of which Shri Narendra S Shah 48 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 rightly assumed jurisdiction and correctly initiated ingly, the Ground of We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. In the case, the Assessing Officer has reopened the assessment after recording , which has been reproduced by the Assessing Officer in para 2 of the assessment the said reasons recorded are e case was recorded as "An information has been received from ITO Ward 32(3)(2), Mumbai vide letterNo. ITO32(3)(2)/Information /2018-19 dated 14.02.2019 that the bank statement of M/s KalpanikVyapaar Pvt Ltd (AADCK3638E) with ICICI Bank 003505500471), Dahisar Branch for the F.Y 14 reveals payment to Shri Narendra Shah on various dates for the 1.4.2013 to 18.02.2014 amounting to M/s KalpanikVyapaar Pvt. Ltd having Floor, Kolkata has been declared a shell company by SEBIEnquiries have revealed that M/s KalpanikVyapar Pvt. Ltd. has been removed/ struck off from the repister of Companies by the Registrar of Companies, Kolkota and the directors of the said company have also qualified Directors under section 164(2)(a) of the Companies Act. It is pertinent to mention that the assessee is one of the Directors of the said company declared disqualified director by ROC. Kolkata, On ank statement with 1CICI d. (OD AC 0156), it is seen that the total credits from M/s KalpanikVyapaar Ltd during the F Y 2013: 14 amount to Rs,5,23,00,000/ As per the details available for A.Y 2015- appears as MsKalpanikVyapaar Put. Ltd. of which only an amount of R8.7,44,71,520/ was received during the F.Y. 2014-15 relevant to A.Y secured loan during F. Y 2013.14 relevant to A.YHence, an amount of Rs.5,23, 15.It is therefore, evident that the unsecured loan of Rs.5,23,00,000/ KalpanikVyapaar Pvt. Ltd is not genuineIt is pertinent to mention here that in this case, the assessee has filed return of income for the y was also made under section 143(3) of the IT Act, 1961. It is true that the assessee has filed a copy of audited P & L A/c and balance sheet along with the return of income, where various information / material was d material facts as noted above in the reasons for reopening were embedded in such a manner that material evidence could not be discovered by the AO and could not have been discovered with due diligence, accordingly attracting provisions of Explanation 1 of Section 147 of the Act". Accordingly, the A.O. came to the conclusion that the income to the tune of Rs.5,23,00,000/ assessment within the meaning of section 147 of the Act, which entailed into invoking of provisio followed by issuance of notice u/s 148 of the Act after recording the reasons for such reopening of assessment as required under these provisions and obtaining approval u/s 151Notice us 148 of the Act dated 29.03.2019 has been issued electronically. 20. On perusal of the above reasons recorded only information available of Rs.4,14,00,000/- was director. There is no other information wheth undisclosed income in the hands of the assessee or any kind of tax evasion or accommodation entry Officer has merely invoked proceedings reassessment proceedings ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 only an amount of R8.7,44,71,520/ was received during the 15 relevant to A.Y 20015-16. Hence, an amount in ured loan during F. Y 2013.14 relevant to A.YHence, an amount of Rs.5,23,00,000 has been received from M/ 15.It is therefore, evident that the unsecured loan of Rs.5,23,00,000/-received by the assessee from M/s KalpanikVyapaar Pvt. Ltd is not genuineIt is pertinent to mention here that in this case, the assessee has filed return of income for the year under consideration, and assessment was also made under section 143(3) of the IT Act, 1961. It is true that the assessee has filed a copy of audited P & L A/c and balance sheet along with the return of income, where various information / material was disclosed, the requisite material facts as noted above in the reasons for reopening were embedded in such a manner that material evidence could not be discovered by the AO and could not have been discovered with due diligence, accordingly attracting ons of Explanation 1 of Section 147 of the Act". Accordingly, the A.O. came to the conclusion that the income to the tune of Rs.5,23,00,000/- has been escaped assessment within the meaning of section 147 of the Act, which entailed into invoking of provisions of section 147 followed by issuance of notice u/s 148 of the Act after recording the reasons for such reopening of assessment as required under these provisions and obtaining approval u/s 151Notice us 148 of the Act dated 29.03.2019 has been tronically.” On perusal of the above reasons recorded, it is evident that only information available with the Assessing Officer was payment to the assessee from a company in which he was director. There is no other information whether this money was undisclosed income in the hands of the assessee or any kind of tax or accommodation entry was involved. The Assessing Officer has merely invoked proceedings u/s 147 of the Act i.e. reassessment proceedings, on the basis of the information that said Shri Narendra S Shah 49 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 only an amount of R8.7,44,71,520/ was received during the 16. Hence, an amount in ured loan during F. Y 2013.14 relevant to A.YHence, an rom M/s2014- 15.It is therefore, evident that the unsecured loan of received by the assessee from M/s KalpanikVyapaar Pvt. Ltd is not genuineIt is pertinent to mention here that in this case, the assessee has filed return ear under consideration, and assessment was also made under section 143(3) of the IT Act, 1961. It is true that the assessee has filed a copy of audited P & L A/c and balance sheet along with the return of income, where isclosed, the requisite material facts as noted above in the reasons for reopening were embedded in such a manner that material evidence could not be discovered by the AO and could not have been discovered with due diligence, accordingly attracting ons of Explanation 1 of Section 147 of the Act". Accordingly, the A.O. came to the conclusion that the income has been escaped assessment within the meaning of section 147 of the Act, ns of section 147 followed by issuance of notice u/s 148 of the Act after recording the reasons for such reopening of assessment as required under these provisions and obtaining approval u/s 151Notice us 148 of the Act dated 29.03.2019 has been it is evident that the Assessing Officer was payment to the assessee from a company in which he er this money was undisclosed income in the hands of the assessee or any kind of tax was involved. The Assessing u/s 147 of the Act i.e. ormation that said company was struck off from the register of (ROC) and the director was be live link of the information with the reason to belie the Assessing Officer. The Ass of unsecured loan from the company M/s KalpanicVyapar Pvt. Ltd. to the assessee in two financial years i.e. financial year 2013 and 2014-15 and formed belief that the unsecured loan received by the assessee from M/s The said information of the loan was already available in the balance sheet and other documents filed along with return of income, which was further subjected to assessment u/s 143(3) of the Act. This fact has also Officer in the reasons recorded. The Assessing Officer however further noted that material evidence could not be discovered by the Assessing Officer with due diligence and therefore provisions of section 147 r.w. Explan is no failure on the part of the assessee truly and fully. The reasons to belief presumption and there is no tangible material to form the belief that income escaped assessment. The facts and circumstances of the case relied upon the Ld. CIT(A) are distinguishable. In the case of Raymond woolen mills Ltd Vs ITO (1999) 236 ITR 34 (SC) Hon’ble Supreme Court has held material on which a reasonable personcould have ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 company was struck off from the register of Registrar of the director was disqualified. In our opinion there link of the information with the reason to belie the Assessing Officer. The Assessing Officer has mentioned the fact of unsecured loan from the company M/s KalpanicVyapar Pvt. Ltd. to the assessee in two financial years i.e. financial year 2013 15 and formed belief that the unsecured loan received by the assessee from M/s KalpanicVypar Pvt. Ltd. was The said information of the loan was already available in the balance sheet and other documents filed along with return of was further subjected to assessment u/s 143(3) of the Act. This fact has also been duly recorded by the Assessing reasons recorded. The Assessing Officer however further noted that material evidence could not be discovered by the ith due diligence and therefore provisions of section 147 r.w. Explanation 1 are attracted. In our opinion is no failure on the part of the assessee in disclosing the he reasons to belief are mere based on the presumption and there is no tangible material to form the belief ped assessment. The facts and circumstances of the case relied upon the Ld. CIT(A) are distinguishable. In the case mond woolen mills Ltd Vs ITO (1999) 236 ITR 34 (SC) Hon’ble Supreme Court has held that there has to be a relevant a reasonable personcould have formed requisite Shri Narendra S Shah 50 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 Registrar of companies . In our opinion there should link of the information with the reason to believe recorded by essing Officer has mentioned the fact of unsecured loan from the company M/s KalpanicVyapar Pvt. Ltd. to the assessee in two financial years i.e. financial year 2013-14 15 and formed belief that the unsecured loan received by was not genuine. The said information of the loan was already available in the balance sheet and other documents filed along with return of was further subjected to assessment u/s 143(3) of been duly recorded by the Assessing reasons recorded. The Assessing Officer however further noted that material evidence could not be discovered by the ith due diligence and therefore provisions of . In our opinion, there ing the material mere based on the presumption and there is no tangible material to form the belief ped assessment. The facts and circumstances of the case relied upon the Ld. CIT(A) are distinguishable. In the case mond woolen mills Ltd Vs ITO (1999) 236 ITR 34 (SC) ,the that there has to be a relevant formed requisite belief. In the instant case the loan from KalpanicVyapar Pvt. Ltd. to the assessee was already part of the regular balance sheet filed by the assessee and in the information received from the investigation wing no new facts other than that said company has given loan to the assessee, has come out and therefore, there is no relevant material to form requisite belief that income escaped in the case of the assessee. In the case of ,the Hon’ble Supreme Court whether reassessment proceedings are validly initiated, it should be seen that whether there was prima facie some material to form belief that income has escaped information in the case of assessee which could indicate income has escaped assessment. The facts and circumstances in the other cases relied upon by the Ld. CIT(A) also are distinguishable. In the case there is no such informatio assessee has received any accommodation entry from M/s KalpanicVyapar Pvt. Ltd. the said company along with his wife. In view of the above discussion, we set aside the finding of the Ld. CIT(A) and h there is no live link of the information recorded and therefore reassessment proceedings initiated on the basis of the said reasons recorded are quashed ab initio. The ground No. 1 of the appeal is accordingly allowed. quashed the reassessment proceedings and therefore adjudication ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 In the instant case the loan from KalpanicVyapar Pvt. Ltd. to the assessee was already part of the regular balance sheet filed by the assessee and in the information received from the investigation wing no new facts other than that said company has given loan to has come out and therefore, there is no relevant material to form requisite belief that income escaped in the case of the assessee. In the case of Raymond woolen Mills Ltd (sup the Hon’ble Supreme Court has further held that for determination whether reassessment proceedings are validly initiated, it should be seen that whether there was prima facie some material to form belief income has escaped. There is no such prima facie in the case of assessee which could indicate income has escaped assessment. The facts and circumstances in the other cases relied upon by the Ld. CIT(A) also are distinguishable. In the case there is no such informatio assessee has received any accommodation entry from M/s KalpanicVyapar Pvt. Ltd. The assessee himself was the director of the said company along with his wife. In view of the above discussion, we set aside the finding of the Ld. CIT(A) and h there is no live link of the information with that recorded and therefore reassessment proceedings initiated on the basis of the said reasons recorded are quashed ab initio. The ground No. 1 of the appeal is accordingly allowed. quashed the reassessment proceedings and therefore adjudication Shri Narendra S Shah 51 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 In the instant case the loan from KalpanicVyapar Pvt. Ltd. to the assessee was already part of the regular balance sheet filed by the assessee and in the information received from the investigation wing no new facts other than that said company has given loan to has come out and therefore, there is no relevant material to form requisite belief that income escaped in the case of Raymond woolen Mills Ltd (supra) for determination whether reassessment proceedings are validly initiated, it should be seen that whether there was prima facie some material to form belief ma facie material or in the case of assessee which could indicate that income has escaped assessment. The facts and circumstances in the other cases relied upon by the Ld. CIT(A) also are distinguishable. In the case there is no such information that assessee has received any accommodation entry from M/s assessee himself was the director of the said company along with his wife. In view of the above discussion, we set aside the finding of the Ld. CIT(A) and hold that that of the reasons recorded and therefore reassessment proceedings initiated on the basis of the said reasons recorded are quashed ab initio. The ground No. 1 of the appeal is accordingly allowed. Since we have quashed the reassessment proceedings and therefore adjudication of the ground No. 2 challenging the merit of the academic only, therefore, we are not adjudicating upon same and dismiss as infructuous appeal of the assessee for paras. 20.1 The ground No. 3 raised by the assessee is in relation to initiation of penalty u/s 271(1)(c) of the Act been levied by way of this order by th of levy of penalty being premature assessee is dismissed as infructuous. 21. Now, we take up the cross appeals of the assessee and the Revenue for assessment year 2015 assessee and the Revenue are reproduced as under: Assessee’s appeal 1. On the facts and in the in law, the Hon'ble CIT(A) erred in upholding the addition of Rs.7,50,71,520/ unsecured loan availed from the co wife is one of the directors by merely relying on the contention of the Ld AO that the name of the company has been struck off from the register of the companies without appreciating that the name has been removed for non this is an accommodation providing company as held by the Ld AO as unexplained cash credit u/s 68 of the IT Act 1961 and the reason assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and rules ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 of the ground No. 2 challenging the merit of the addition is rendered therefore, we are not adjudicating upon same and dismiss as infructuous, although identical ground appeal of the assessee for AY 2015-16 will be dealt in forthcoming The ground No. 3 raised by the assessee is in relation to initiation of penalty u/s 271(1)(c) of the Act. Since penalty has not been levied by way of this order by the Assessing Officer of levy of penalty being premature, the ground raised by the assessee is dismissed as infructuous. we take up the cross appeals of the assessee and the Revenue for assessment year 2015-16. The grounds raised by the assessee and the Revenue are reproduced as under: On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the addition of Rs.7,50,71,520/- by wrongly treating unsecured loan availed from the company in which his wife is one of the directors by merely relying on the contention of the Ld AO that the name of the company has been struck off from the register of the companies without appreciating that the name has been removed for non-filling of financial statements and not because this is an accommodation providing company as held by the Ld AO as unexplained cash credit u/s 68 of the IT Act 1961 and the reason assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and rules made there under. Shri Narendra S Shah 52 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 addition is rendered therefore, we are not adjudicating upon same and , although identical ground No. 1 raised in dealt in forthcoming The ground No. 3 raised by the assessee is in relation to ince penalty has not e Assessing Officer, the issue the ground raised by the we take up the cross appeals of the assessee and the 16. The grounds raised by the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the by wrongly treating mpany in which his wife is one of the directors by merely relying on the contention of the Ld AO that the name of the company has been struck off from the register of the companies without appreciating that the name has been removed ncial statements and not because this is an accommodation providing company as held by the Ld AO as unexplained cash credit u/s 68 of the IT Act 1961 and the reason assigned for doing so are wrong and contrary to the Provisions of Income Tax Act 2. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the addition of Rs.29,29,800/ 43CA of the IT Act 1961 without appreciating that the said provisions are not applica case and thereason assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and rules made there under. 3. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the penalty initiated by the Ld AO u/s. 271 (1)(c) of the IT Act 1961 and the reason assigned for doing so are wrong and contrary to the provision of Income Tax Act and rules made there under. Revenue’s appeal 1. Whether the Ld. CITIA) has erred both in law and o facts in deleting the addition Rs. 18.50.000/ towards unexplained expenditure u/s 69C of the IT Act. 2. 2 Whether the Ld. CIT(A) has erred both in law and on facts in deleting 3,34,66,000/ towards unexplained Sundry Creditor within the provisi 22. The ground No. 1 of the appeal of the assessee relates to addition of Rs.7,50,71,520/ was received by the assessee as unsecured loan from M/s KalpanicVyapar Pvt. Ltd. which i a director during relevant period along with his wife. The Assessing Officer made the addition for the reason that the assessee filed only ledger confirmation of M/s KalpanicVyapar Pvt. Ltd. without accompanying income tax said party. The Assessing Officer mentioned that notice u/s 133(6) ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the addition of Rs.29,29,800/- made by the Ld AO u/s 43CA of the IT Act 1961 without appreciating that the said provisions are not applicable to the facts of the case and thereason assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and rules made there under. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the penalty initiated by the Ld AO u/s. 271 (1)(c) of the IT Act 1961 and the reason assigned for doing so are wrong and contrary to the provision of Income Tax Act and rules made there under. Whether the Ld. CITIA) has erred both in law and o facts in deleting the addition Rs. 18.50.000/ towards unexplained expenditure u/s 69C of the IT 2 Whether the Ld. CIT(A) has erred both in law and on facts in deleting 3,34,66,000/- the addition towards unexplained Sundry Creditor within the provision of the Section 41(1) of the IT Act. The ground No. 1 of the appeal of the assessee relates to addition of Rs.7,50,71,520/- held as unexplained cash credit which was received by the assessee as unsecured loan from M/s KalpanicVyapar Pvt. Ltd. which is a company in which assessee was a director during relevant period along with his wife. The Assessing Officer made the addition for the reason that the assessee filed only ledger confirmation of M/s KalpanicVyapar Pvt. Ltd. without accompanying income tax return and the bank statement of the said party. The Assessing Officer mentioned that notice u/s 133(6) Shri Narendra S Shah 53 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the made by the Ld AO u/s 43CA of the IT Act 1961 without appreciating that the ble to the facts of the case and thereason assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the penalty initiated by the Ld AO u/s. 271 (1)(c) of the IT Act 1961 and the reason assigned for doing so are wrong and contrary to the provision of Income Tax Act Whether the Ld. CITIA) has erred both in law and on facts in deleting the addition Rs. 18.50.000/ towards unexplained expenditure u/s 69C of the IT 2 Whether the Ld. CIT(A) has erred both in law and the addition towards unexplained Sundry Creditor within the The ground No. 1 of the appeal of the assessee relates to held as unexplained cash credit which was received by the assessee as unsecured loan from M/s s a company in which assessee was a director during relevant period along with his wife. The Assessing Officer made the addition for the reason that the assessee filed only ledger confirmation of M/s KalpanicVyapar Pvt. Ltd. without return and the bank statement of the said party. The Assessing Officer mentioned that notice u/s 133(6) of the Act was not issued due to limited time available with him for passing of the assessment order. The Assessing Officer has also noted that said co removed/strike off from the register maintained by R companies (ROC) and the director section 164(2)(A) of the Companies Act, 1956. The Assessing Officer further obtained information from the Income Kolkata to confirm whether said company had filed return of income. The relevant observations by the Assessing Officer are reproduced as under: “5.13 It is seen from the images that M/s KalpanikVyapaar Pvt Ltd has filed its returns of income on 15.11.2017, whereas the commission u/s 131(1)(d) of the Act was issued on 27.10.2017. Thus, it is clear that M/s KalpanikVyapaar Pvt Ltd has filed its returns of income, after the AO of the said company, has started enqu response to commission us 131(1)(d) of the Act. Therefore, it is nothing but an after though of the assessee to prove that M/s KalpanikVyapaar Pt Ltd has made its compliance. It is not out of place to mention here that the returns of M/s KalpanikVyapaar Pvt Ltd has been uploaded under the digital signature of NARENDRA SHAH from Mumbai itself. Thus, it cannot be said that he could not furnish IT acknowledgement for AY 2015 Pt Ltd due to disputes with the said party. It is a that the assessee Shri Narendra Shah is actively participated in day KalpanikVyapaar Pt Ltd and he is controlling its business affairs. Even a perusal of the bank statement of M/s KalpanikVyapaar Pt Ltd, it is se other than one or two, have been directly transferred to either the assessee or his relatives or the companies, where the assessee is one of the directors. ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 of the Act was not issued due to limited time available with him for passing of the assessment order. The Assessing Officer has also noted that said company M/s KalpanicVyapar Pvt. Ltd. was from the register maintained by R and the directors have been disqualify in terms of section 164(2)(A) of the Companies Act, 1956. The Assessing Officer ed information from the Income-tax Department, Kolkata to confirm whether said company had filed return of income. The relevant observations by the Assessing Officer are reproduced as under: 5.13 It is seen from the images that M/s KalpanikVyapaar has filed its returns of income on 15.11.2017, whereas the commission u/s 131(1)(d) of the Act was issued on 27.10.2017. Thus, it is clear that M/s KalpanikVyapaar Pvt Ltd has filed its returns of income, after the AO of the said company, has started enqu response to commission us 131(1)(d) of the Act. Therefore, it is nothing but an after though of the assessee to prove that M/s KalpanikVyapaar Pt Ltd has made its compliance. It is not out of place to mention here that the returns of M/s yapaar Pvt Ltd has been uploaded under the digital signature of NARENDRA SHAH from Mumbai itself. Thus, it cannot be said that he could not furnish IT acknowledgement for AY 2015-16 of M/s KalpanikVyapaar Pt Ltd due to disputes with the said party. It is a that the assessee Shri Narendra Shah is actively participated in day-to-day business activities of M/s KalpanikVyapaar Pt Ltd and he is controlling its business affairs. Even a perusal of the bank statement of M/s KalpanikVyapaar Pt Ltd, it is seen that all the amounts other than one or two, have been directly transferred to either the assessee or his relatives or the companies, where the assessee is one of the directors. Shri Narendra S Shah 54 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 of the Act was not issued due to limited time available with him for passing of the assessment order. The Assessing Officer has also mpany M/s KalpanicVyapar Pvt. Ltd. was from the register maintained by Registrar of the have been disqualify in terms of section 164(2)(A) of the Companies Act, 1956. The Assessing Officer tax Department, Kolkata to confirm whether said company had filed return of income. The relevant observations by the Assessing Officer are 5.13 It is seen from the images that M/s KalpanikVyapaar has filed its returns of income on 15.11.2017, whereas the commission u/s 131(1)(d) of the Act was issued on 27.10.2017. Thus, it is clear that M/s KalpanikVyapaar Pvt Ltd has filed its returns of income, after the AO of the said company, has started enquiries in response to commission us 131(1)(d) of the Act. Therefore, it is nothing but an after though of the assessee to prove that M/s KalpanikVyapaar Pt Ltd has made its compliance. It is not out of place to mention here that the returns of M/s yapaar Pvt Ltd has been uploaded under the digital signature of NARENDRA SHAH from Mumbai itself. Thus, it cannot be said that he could not furnish IT 16 of M/s KalpanikVyapaar Pt Ltd due to disputes with the said party. It is also clear that the assessee Shri Narendra Shah is actively day business activities of M/s KalpanikVyapaar Pt Ltd and he is controlling its business affairs. Even a perusal of the bank statement of M/s en that all the amounts other than one or two, have been directly transferred to either the assessee or his relatives or the companies, where 5.14 As discussed in the above paragraphs, the company has been declared as 30.06.2017 by ROC, Kolkata. The so called returns for AY 2016-17 & 2017 digital signature on 15.11.2017, by the date of which, the company was legally not in existence as the same has been removed from the Registrar. 23. On further appeal, the Ld. CIT(A) in his detailed finding upheld the addition made by the Assessing Officer observing as under: “6.2Appellate Decision:I have carefully considered the factsof the case,assessment order and ma The 4O has discussed this issue vide para 5 in his assessment order. The assessee has shown loan of Rs. 13,33,21,520/ balance sheet. During the course of assessment proceedings, the assessee was ask confirmations, IT and bank statements of the parties, from whom, the assessee has received the loans. In response to the same, the AR of the assessee vide letter dated 07.09.2017 filed ledger confirmation of M/s KalpanikVyapar Pt L Narendra Shah in the capacity of one ofors to the said company. The appellant was requested to furnish theledger confirmation for whole year along with IT and bank statement of the concerned party. However, the assessee did not file the requisite details. 6.3 The A.O. has reported that further, enquirtes revealed that M/s KalpanikVyapaar Pvt. Ltd having address 32, Ezra Street, Sth Floor, Kolkata was declared a Shell company by SEBI and removed/struck off from the register of Companies b the Registrar of Companies, Kolkota and the directors of the said company also been declared as Disqualified Directors' under section 164(2)(a) of the Companies Act and that the appellant was one of the Directors of the said company declared a director by ROC Kolkota. The AO on verification of the assessee's bank statement with ICICI Bank Ltd., noticed that out of total amount of Rs.13,33,21,520/ ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 5.14 As discussed in the above paragraphs, the company has been declared as strike off vide order dated 30.06.2017 by ROC, Kolkata. The so called returns for AY 17 & 2017-18 are filed by the assessee under his digital signature on 15.11.2017, by the date of which, the company was legally not in existence as the same has been removed from the Registrar.” On further appeal, the Ld. CIT(A) in his detailed finding upheld the addition made by the Assessing Officer observing as under: 6.2Appellate Decision:I have carefully considered the factsof the case,assessment order and material on record. The 4O has discussed this issue vide para 5 in his assessment order. The assessee has shown loan of Rs. 13,33,21,520/- from M/s KalpanikVyapar Pvt Ltd in the balance sheet. During the course of assessment proceedings, the assessee was asked to furnish the ledger confirmations, IT and bank statements of the parties, from whom, the assessee has received the loans. In response to the same, the AR of the assessee vide letter dated 07.09.2017 filed ledger confirmation of M/s KalpanikVyapar Pt Ltd duly signed by Mrs. Darshana Narendra Shah in the capacity of one ofors to the said company. The appellant was requested to furnish theledger confirmation for whole year along with IT and bank statement of the concerned party. However, the assessee not file the requisite details. 6.3 The A.O. has reported that further, enquirtes revealed that M/s KalpanikVyapaar Pvt. Ltd having address 32, Ezra Street, Sth Floor, Kolkata was declared a Shell company by SEBI and removed/struck off from the register Companies b the Registrar of Companies, Kolkota and the directors of the said company also been declared as Disqualified Directors' under section 164(2)(a) of the Companies Act and that the appellant was one of the Directors of the said company declared as disqualified director by ROC Kolkota. The AO on verification of the assessee's bank statement with ICICI Bank Ltd., noticed that out of total amount of Rs.13,33,21,520/- appeared as Shri Narendra S Shah 55 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 5.14 As discussed in the above paragraphs, the company strike off vide order dated 30.06.2017 by ROC, Kolkata. The so called returns for AY 18 are filed by the assessee under his digital signature on 15.11.2017, by the date of which, the company was legally not in existence as the same has been On further appeal, the Ld. CIT(A) in his detailed finding upheld the addition made by the Assessing Officer observing as under: 6.2Appellate Decision:I have carefully considered the terial on record. The 4O has discussed this issue vide para 5 in his assessment order. The assessee has shown loan of Rs. from M/s KalpanikVyapar Pvt Ltd in the balance sheet. During the course of assessment ed to furnish the ledger confirmations, IT and bank statements of the parties, from whom, the assessee has received the loans. In response to the same, the AR of the assessee vide letter dated 07.09.2017 filed ledger confirmation of M/s td duly signed by Mrs. Darshana Narendra Shah in the capacity of one ofors to the said company. The appellant was requested to furnish theledger confirmation for whole year along with IT and bank statement of the concerned party. However, the assessee 6.3 The A.O. has reported that further, enquirtes revealed that M/s KalpanikVyapaar Pvt. Ltd having address 32, Ezra Street, Sth Floor, Kolkata was declared a Shell company by SEBI and removed/struck off from the register Companies b the Registrar of Companies, Kolkota and the directors of the said company also been declared as Disqualified Directors' under section 164(2)(a) of the Companies Act and that the appellant was one of the s disqualified director by ROC Kolkota. The AO on verification of the assessee's bank statement with ICICI Bank Ltd., noticed appeared as unsecured loan from M/s KalpanikVyapaar Pvt. Ltd. an amount of Rs.7,44,7 2014-15. Further, during the course of assessment proceedings, notices u/s 133(6) dated 14.11.2019 were sent to Kotak Mahindra Bank and ICICI Bank asking for bank statements of the appellant for the period 2013 The same was received and considered by AO. 6.4 The AO concluded from the bank statement of ICICI bank that the assessee received total credits amounting to Rs. 7,44,71,520/ was declared a shell company by SEBI and whose nam was struck off from the register of companies by the Registrar of Companies, Kolkata and the directors of the said company was also declared as Disqualified Directors u/ 164(2)(a) of the companies Act. The appellant was also found one of the directors of which was declared as Disqualified Director by ROC,Kolkata. The assessee's explanation was considered but not accepted by AO. 6.5 Further, in response to the remand report of the AO, the appellant has submitted as under: "That the loan providing company has not been declared as shell company as mentioned in the Remand Report. In support of that we have already submitted the list of 331 companies downloaded from the internet site declared as shell company by Hon'ble SEBt. Instead a notice has been issued us. 248(1) of the companies act 2013 by the Hon'ble Registrar asking us to show as to why the name of the loan providing company should not be struck off from Register, the copy of the notice enclosed hereto as per Ex 'A: the loan providing company is appearing is submitted herewith duly marked. 2. Since the loan providing company did not file reply to show cause notice issued u/s. 248(1), the Hon'ble Registrar of companies passed order of the loan providing company from its Register. Copy of the order passed dated 30/06/2017 and the relevant page where the name of loan providing company is appearing is ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 unsecured loan from M/s KalpanikVyapaar Pvt. Ltd. an amount of Rs.7,44,71,520/- was received during the F.Y 15. Further, during the course of assessment proceedings, notices u/s 133(6) dated 14.11.2019 were sent to Kotak Mahindra Bank and ICICI Bank asking for bank statements of the appellant for the period 2013 ame was received and considered by AO. 6.4 The AO concluded from the bank statement of ICICI bank that the assessee received total credits amounting to Rs. 7,44,71,520/- from KalpanikVyapar Pvt.Ltd., which was declared a shell company by SEBI and whose nam was struck off from the register of companies by the Registrar of Companies, Kolkata and the directors of the said company was also declared as Disqualified Directors u/ 164(2)(a) of the companies Act. The appellant was also found one of the directors of KalpanikVyapar Pvt. Ltd. which was declared as Disqualified Director by ROC,Kolkata. The assessee's explanation was considered but not accepted by AO. 6.5 Further, in response to the remand report of the AO, the appellant has submitted as under: e loan providing company has not been declared as shell company as mentioned in the Remand Report. In support of that we have already submitted the list of 331 companies downloaded from the internet site declared as shell company by Hon'ble SEBt. Instead a show cause notice has been issued us. 248(1) of the companies act 2013 by the Hon'ble Registrar asking us to show as to why the name of the loan providing company should not be struck off from Register, the copy of the notice enclosed hereto as per Ex 'A: The relevant page where the name of the loan providing company is appearing is submitted herewith duly marked. 2. Since the loan providing company did not file reply to show cause notice issued u/s. 248(1), the Hon'ble Registrar of companies passed order u/S.248(5) striking off the name of the loan providing company from its Register. Copy of the order passed dated 30/06/2017 and the relevant page where the name of loan providing company is appearing is Shri Narendra S Shah 56 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 unsecured loan from M/s KalpanikVyapaar Pvt. Ltd. an was received during the F.Y 15. Further, during the course of assessment proceedings, notices u/s 133(6) dated 14.11.2019 were sent to Kotak Mahindra Bank and ICICI Bank asking for bank statements of the appellant for the period 2013-14. 6.4 The AO concluded from the bank statement of ICICI bank that the assessee received total credits amounting to from KalpanikVyapar Pvt.Ltd., which was declared a shell company by SEBI and whose name was struck off from the register of companies by the Registrar of Companies, Kolkata and the directors of the said company was also declared as Disqualified Directors u/ 164(2)(a) of the companies Act. The appellant was also KalpanikVyapar Pvt. Ltd. which was declared as Disqualified Director by ROC,Kolkata. The assessee's explanation was considered 6.5 Further, in response to the remand report of the AO, the e loan providing company has not been declared as shell company as mentioned in the Remand Report. In support of that we have already submitted the list of 331 companies downloaded from the internet site declared as show cause notice has been issued us. 248(1) of the companies act 2013 by the Hon'ble Registrar asking us to show as to why the name of the loan providing company should not be struck off from Register, the copy of the notice enclosed The relevant page where the name of the loan providing company is appearing is submitted 2. Since the loan providing company did not file reply to show cause notice issued u/s. 248(1), the Hon'ble Registrar u/S.248(5) striking off the name of the loan providing company from its Register. Copy of the order passed dated 30/06/2017 and the relevant page where the name of loan providing company is appearing is submitted herewith duly marked as per Ex 'B' for your honour's perusal and consideration. In view of the above your honour will appreciate that the contention of the Ld AO that this is a shell company is without any cogent evidence hence the genuine loan given by Ms. KalpanikVyapar (P)Ltd should be treated a delete the unwarranted addition made to the returned income and oblige." 6.6 From above reply, it appears that the appellant has tried to take unwanted benefits of the action of Hon'ble Registrar of companies, in issu appellant. As per section 248(1) of the companies act 2013 a notice should be sent to the Company and its directors to remove the name from Register of Companies with request to represent along with copies of relevant documents.However, facts remained same that since, the loan providing company did not file reply to show cause notice issued u/s. 248(1), the Hon'ble Registrar of companies passed order us. 248(5) striking off the name of the loan providing company fromter. The arg appellant that the loan providing company has declared as shell company as mentioned in the Remand Report, is baseless and cannot be entertained. Further, the claim made by appellant, that in support of this issue it has submitted the list of internet site declared as shell company by Hon'ble SEB. This is out of knowledge that why the appellant is misleading the issue. When the fact is clear that the Hon'ble Registrar of companies passed order W/s. 248(5) strik off the name of the loan providing company from its Register i.e. M/s KalpanikVyaparPVt Ltd, why appellant provided list of companie appellant has tried poor attempt to mislead the issue. The relevant page clearly KalpanikVyapar Pvt Ltd, strike off at serial number 5030 reproduced as under for the sake of clarity: 6.7 The AO had made detailed analysis of this issue. Whereas, during the assessment proceedings the appellant has shown casual approa furnish the ITR and bank statement of M/s KalpanikVyapar Put Ltd however, no reply was made and the proceedings ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 submitted herewith duly marked as per Ex 'B' for your honour's perusal and consideration. In view of the above your honour will appreciate that the contention of the Ld AO that this is a shell company is without any cogent evidence hence the genuine loan given by Ms. KalpanikVyapar (P)Ltd should be treated as genuine and the ld AO be directed to delete the unwarranted addition made to the returned income and oblige." 6.6 From above reply, it appears that the appellant has tried to take unwanted benefits of the action of Hon'ble Registrar of companies, in issuing show cause notice to the appellant. As per section 248(1) of the companies act 2013 a notice should be sent to the Company and its directors to remove the name from Register of Companies with request to represent along with copies of relevant .However, facts remained same that since, the loan providing company did not file reply to show cause notice issued u/s. 248(1), the Hon'ble Registrar of companies passed order us. 248(5) striking off the name of the loan providing company fromter. The argument of the appellant that the loan providing company has declared as shell company as mentioned in the Remand Report, is baseless and cannot be entertained. Further, the claim made by appellant, that in support of this issue it has submitted the list of 331 companies downloaded from the internet site declared as shell company by Hon'ble SEB. This is out of knowledge that why the appellant is misleading the issue. When the fact is clear that the Hon'ble Registrar of companies passed order W/s. 248(5) strik off the name of the loan providing company from its Register i.e. M/s KalpanikVyaparPVt Ltd, why appellant provided list of companies declared as shell company by S appellant has tried poor attempt to mislead the issue. The relevant page clearly showing name of M/s KalpanikVyapar Pvt Ltd, strike off at serial number 5030 reproduced as under for the sake of clarity: 6.7 The AO had made detailed analysis of this issue. Whereas, during the assessment proceedings the appellant has shown casual approach. The assessee was asked to furnish the ITR and bank statement of M/s KalpanikVyapar Put Ltd however, no reply was made and the proceedings Shri Narendra S Shah 57 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 submitted herewith duly marked as per Ex 'B' for your honour's perusal and consideration. In view of the above your honour will appreciate that the contention of the Ld AO that this is a shell company is without any cogent evidence hence the genuine loan given by Ms. KalpanikVyapar (P)Ltd s genuine and the ld AO be directed to delete the unwarranted addition made to the returned 6.6 From above reply, it appears that the appellant has tried to take unwanted benefits of the action of Hon'ble ing show cause notice to the appellant. As per section 248(1) of the companies act 2013 a notice should be sent to the Company and its directors to remove the name from Register of Companies with request to represent along with copies of relevant .However, facts remained same that since, the loan providing company did not file reply to show cause notice issued u/s. 248(1), the Hon'ble Registrar of companies passed order us. 248(5) striking off the name of ument of the appellant that the loan providing company has declared as shell company as mentioned in the Remand Report, is baseless and cannot be entertained. Further, the claim made by appellant, that in support of this issue it has 331 companies downloaded from the internet site declared as shell company by Hon'ble SEB. This is out of knowledge that why the appellant is misleading the issue. When the fact is clear that the Hon'ble Registrar of companies passed order W/s. 248(5) striking off the name of the loan providing company from its Register i.e. M/s KalpanikVyaparPVt Ltd, why appellant provided s declared as shell company by SEBI.The appellant has tried poor attempt to mislead the issue. The showing name of M/s KalpanikVyapar Pvt Ltd, strike off at serial number 5030 6.7 The AO had made detailed analysis of this issue. Whereas, during the assessment proceedings the appellant ch. The assessee was asked to furnish the ITR and bank statement of M/s KalpanikVyapar Put Ltd however, no reply was made and the proceedings were pending long. The assessee claimed of non cooperation of the said party for failure to the notice of the AO at stage of the assessment proceedings. 6.8 Besides, from the ledger confirmation fled by appellant the AO noticed that the ledger confirmation was signed by the assessee's wife Smt Darshana Narendra Shah in the capacity of Director / Authorized Signatory. doubt was created that why IT and bank statement could not produced from a company, where she is one of the directors of the said company and had authority to sign on the ledger confirmations. Thus, it cannot be said that the assessee has disput not furnish relevant documents. The A0 concluded it as an excuse taken by the appellant to drag the proceedings to hide the fact that M/s KalpanikVyapaar Pvt Lid has not filed its return of income for A.Y. 2015 6.9 To further strengthen the observations with cemented evidences, a commission us 131(1)(d) of the Act was issued to Income Tax Officer, Ward 4(4), Kolkata, who had jurisdiction over the case of M/s KalpanikVyapaar Pvt Ltd. In response to the same, the AO re activities are carried on by M/s KalpanikVyapaar Pvt Ltd and it has not filed its return of income after A.Y.2014 Also reported that he has issued summons w/ 131 of the Act to the directors of M/s KalpanikVyapaar Pvt Ltd on 13.12.2017 for personal attendance, but none appeared before him 6.10 Further, in response to show cause issued by AO the appellant submitted that the company has filed its return of income, but the copies are not available, berefore, furnished the copies of a &and submitted that the transaction stands proved the test of genuineness. issions of the was considered, but not accepted by A0. to analyzed the issue AO issued commission W/s 131(1)(d) of the Act to the Assessing Officer, having territorial jurisdiction over the case of M/s KalpanikVyapaar Pvt Ltd, wherein he has reported that the company has not filed its return of income after AY 2014 15. However, the appellant further contended that M/s KalpanikVyapaar Pt Ltd file ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 were pending long. The assessee claimed of non cooperation of the said party for failure to the notice of the t stage of the assessment proceedings. 6.8 Besides, from the ledger confirmation fled by appellant the AO noticed that the ledger confirmation was signed by the assessee's wife Smt Darshana Narendra Shah in the capacity of Director / Authorized Signatory. doubt was created that why IT and bank statement could not produced from a company, where she is one of the directors of the said company and had authority to sign on the ledger confirmations. Thus, it cannot be said that the assessee has dispute with the said company and he could not furnish relevant documents. The A0 concluded it as an excuse taken by the appellant to drag the proceedings to hide the fact that M/s KalpanikVyapaar Pvt Lid has not filed its return of income for A.Y. 2015-16. To further strengthen the observations with cemented evidences, a commission us 131(1)(d) of the Act was issued to Income Tax Officer, Ward 4(4), Kolkata, who had jurisdiction over the case of M/s KalpanikVyapaar Pvt Ltd. In response to the same, the AO reported that no business activities are carried on by M/s KalpanikVyapaar Pvt Ltd and it has not filed its return of income after A.Y.2014 Also reported that he has issued summons w/ 131 of the Act to the directors of M/s KalpanikVyapaar Pvt Ltd on 2.2017 for personal attendance, but none appeared 6.10 Further, in response to show cause issued by AO the appellant submitted that the company has filed its return of income, but the copies are not available, berefore, furnished the copies of acknowledgments of ITS for A.Y. 2016 &and submitted that the transaction stands proved the test of genuineness. issions of the was considered, but not accepted by A0. to analyzed the issue AO issued commission W/s 131(1)(d) of the Act to the Assessing ficer, having territorial jurisdiction over the case of M/s KalpanikVyapaar Pvt Ltd, wherein he has reported that the company has not filed its return of income after AY 2014 15. However, the appellant further contended that M/s KalpanikVyapaar Pt Ltd filed its returns of income for A. Shri Narendra S Shah 58 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 were pending long. The assessee claimed of non- cooperation of the said party for failure to the notice of the 6.8 Besides, from the ledger confirmation fled by appellant the AO noticed that the ledger confirmation was signed by the assessee's wife Smt Darshana Narendra Shah in the capacity of Director / Authorized Signatory. Therefore, doubt was created that why IT and bank statement could not produced from a company, where she is one of the directors of the said company and had authority to sign on the ledger confirmations. Thus, it cannot be said that the e with the said company and he could not furnish relevant documents. The A0 concluded it as an excuse taken by the appellant to drag the proceedings to hide the fact that M/s KalpanikVyapaar Pvt Lid has not To further strengthen the observations with cemented evidences, a commission us 131(1)(d) of the Act was issued to Income Tax Officer, Ward 4(4), Kolkata, who had jurisdiction over the case of M/s KalpanikVyapaar Pvt Ltd. ported that no business activities are carried on by M/s KalpanikVyapaar Pvt Ltd and it has not filed its return of income after A.Y.2014-15. Also reported that he has issued summons w/ 131 of the Act to the directors of M/s KalpanikVyapaar Pvt Ltd on 2.2017 for personal attendance, but none appeared 6.10 Further, in response to show cause issued by AO the appellant submitted that the company has filed its return of income, but the copies are not available, berefore, furnished cknowledgments of ITS for A.Y. 2016-17 &and submitted that the transaction stands proved the test of genuineness. issions of the was considered, but not accepted by A0. to analyzed the issue AO issued commission W/s 131(1)(d) of the Act to the Assessing ficer, having territorial jurisdiction over the case of M/s KalpanikVyapaar Pvt Ltd, wherein he has reported that the company has not filed its return of income after AY 2014- 15. However, the appellant further contended that M/s d its returns of income for A. Yrs. 2016.17 and 2017 acknowledgements of ITS were filed in support of claim from where, it was seen that M/s KalpanikVyapaar Pvt Ltd filed its returns of income on 15.11.2017. whereas the commission W/s 27.10.2017 by 10. Thus, it was clearly construed that Ms. Kalpanik. Vyapaar Pvt Ltd filed its returns of income, after the AO of the said Company started enquiries in response to commission us. 131 of the Act. Therefore, it the assessee to prove that M/s KalpanikVyapaar Pt Ltd made its compliance. As well, the returns of M/s KalpanikVyapaar Pt Ltd was uploaded under the digital signature of NARENDRA SHAH from Mumbai itself. Therefore, the cont furnish IT acknowledgement for AY 2015 KalpanikVyapaar Pt Ltd due to disputes with the said party was found fake explanation. The assessee Shri Narendra Shah actively particinated in day of M/s KalpanikVyapaarvt Ltd and controlling its business affairs and on perusal of the bank statement of M/s KalpanikVyapaar Pvt Ltd, revealed that all the amounts directly transferred to either the assessee or his relatives or the companies, where t directors. 6.11 In this case, the assessee has failed to discharge the initial onus casted upon him to prove the genuineness of the transactions. The assessee has failed to prove the primary ingredients to prove the transaction a assessee in this case has not filed the ITR of the concerned party, from whom, he has received such huge loans notwithstanding to the issuance of various reminders. Further, as per the findings of the jurisdictional AO also, M/s KalpanikVy business activities are carried on by the said company.Considering all these facts, an amount of Rs.7,44,71,520/ assessee under section 68 of the Act as unexplained cash credits. ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 Yrs. 2016.17 and 2017-18 and the copies of acknowledgements of ITS were filed in support of claim from where, it was seen that M/s KalpanikVyapaar Pvt Ltd filed its returns of income on 15.11.2017. whereas the commission W/s 131)(d) of the Act was issued on 27.10.2017 by 10. Thus, it was clearly construed that Ms. Kalpanik. Vyapaar Pvt Ltd filed its returns of income, after the AO of the said Company started enquiries in response to commission us. 131 of the Act. Therefore, it was nothing but after though of the assessee to prove that M/s KalpanikVyapaar Pt Ltd made its compliance. As well, the returns of M/s KalpanikVyapaar Pt Ltd was uploaded under the digital signature of NARENDRA SHAH from Mumbai itself. Therefore, the contention of the assesse that he cannot furnish IT acknowledgement for AY 2015-16 of M/s KalpanikVyapaar Pt Ltd due to disputes with the said party was found fake explanation. The assessee Shri Narendra Shah actively particinated in day-to-das business activi of M/s KalpanikVyapaarvt Ltd and controlling its business affairs and on perusal of the bank statement of M/s KalpanikVyapaar Pvt Ltd, revealed that all the amounts directly transferred to either the assessee or his relatives or the companies, where the assessee was one of the 6.11 In this case, the assessee has failed to discharge the initial onus casted upon him to prove the genuineness of the transactions. The assessee has failed to prove the primary ingredients to prove the transaction as a genuine. The assessee in this case has not filed the ITR of the concerned party, from whom, he has received such huge loans notwithstanding to the issuance of various reminders. Further, as per the findings of the jurisdictional AO also, M/s KalpanikVyapaar Pvt Ltd is not in existence and no business activities are carried on by the said company.Considering all these facts, an amount of Rs.7,44,71,520/- is hereby added to the total income of the assessee under section 68 of the Act as unexplained cash Shri Narendra S Shah 59 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 18 and the copies of acknowledgements of ITS were filed in support of claim from where, it was seen that M/s KalpanikVyapaar Pvt Ltd filed its returns of income on 15.11.2017. whereas the 131)(d) of the Act was issued on Thus, it was clearly construed that Ms. Kalpanik. Vyapaar Pvt Ltd filed its returns of income, after the AO of the said Company started enquiries in response to commission us. was nothing but after though of the assessee to prove that M/s KalpanikVyapaar Pt Ltd made its compliance. As well, the returns of M/s KalpanikVyapaar Pt Ltd was uploaded under the digital signature of NARENDRA SHAH from Mumbai itself. ention of the assesse that he cannot 16 of M/s KalpanikVyapaar Pt Ltd due to disputes with the said party was found fake explanation. The assessee Shri Narendra das business activities of M/s KalpanikVyapaarvt Ltd and controlling its business affairs and on perusal of the bank statement of M/s KalpanikVyapaar Pvt Ltd, revealed that all the amounts directly transferred to either the assessee or his relatives or he assessee was one of the 6.11 In this case, the assessee has failed to discharge the initial onus casted upon him to prove the genuineness of the transactions. The assessee has failed to prove the primary s a genuine. The assessee in this case has not filed the ITR of the concerned party, from whom, he has received such huge loans notwithstanding to the issuance of various reminders. Further, as per the findings of the jurisdictional AO also, apaar Pvt Ltd is not in existence and no business activities are carried on by the said company.Considering all these facts, an amount of is hereby added to the total income of the assessee under section 68 of the Act as unexplained cash 6.12 It is observed that the AO had placed on record the entire gamut of finding and there is no further requirement for elaboration. The fact cannot be denied that, that MsKalpanikVyapar Pvt. Ltd. has been removed/ struck off from the register of Companies, Kolkota and the directors of the said company have also been declared as Disqualified Directors and appellant was one of the Directors of the said company declared as disqualified director by ROC Kolkata. Filing returns of income on 15.11.2017, whereas the commission u/s 131(1)d) of the Act was issued on 27.10.2017 by AO, shows appellants meager efforts and further strengthens the bogus transaction of the appellant. Thus, it was clearly construed that Ms. Kalpank. Vy of income, after the AO of the said Company started enquiries in response to commission u/s. 131 of the Act. In view of overall discussion, it can safely be concluded that the loan accepted by the appellant from M/s KalpanikVyapaar Put Ltd is not a genuine loan. The key ingredients of the transaction viz., identity, genuineness and creditworthiness of the transaction have remained unproved. The appellant has failed to submit any credible documents either before AO or before th appellant has shown casual approach towards appeal proceedings and failed to establish the genuineness of transaction. Thus, it is evident that the unsecured loan of Rs. 7,50,71,520/ received by the assessee from M/s KalpanikVyapaar Pvt. the appellant has failed to file any submission with credible evidence, only filing of appeal is not suffice to accept the claim of appellant. On the contrary AO has made analysis of the facts. The contention of the the assessment proceedings that Shri Narendra Shah and his wife Smt. Darshana Shah are the only directors of the said Company in which public holding is NIL, is found baseless.The fact remains the same that name was struck off from the register of(99611 Companies, Kolkata and the directors of the said company was also declared as Disqualified Directors w/s 164(2)(a) of the companies Act. In view of the overall facts discussed as above addition made of Rs. 7,5 accepted from M/s KalpanikVyapaar Pt Ltd Is upheld. Therefore, this ground of appeal no. 1 is Dismissed. ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 6.12 It is observed that the AO had placed on record the entire gamut of finding and there is no further requirement for elaboration. The fact cannot be denied that, that MsKalpanikVyapar Pvt. Ltd. has been removed/ struck off from the register of Companies by the Registrar of Companies, Kolkota and the directors of the said company have also been declared as Disqualified Directors and appellant was one of the Directors of the said company declared as disqualified director by ROC Kolkata. Filing urns of income on 15.11.2017, whereas the commission u/s 131(1)d) of the Act was issued on 27.10.2017 by AO, shows appellants meager efforts and further strengthens the bogus transaction of the appellant. Thus, it was clearly construed that Ms. Kalpank. Vyapaar Pt Ltd filed its returns of income, after the AO of the said Company started enquiries in response to commission u/s. 131 of the Act. In view of overall discussion, it can safely be concluded that the loan accepted by the appellant from M/s yapaar Put Ltd is not a genuine loan. The key ingredients of the transaction viz., identity, genuineness and creditworthiness of the transaction have remained unproved. The appellant has failed to submit any credible documents either before AO or before the undersigned. The appellant has shown casual approach towards appeal proceedings and failed to establish the genuineness of transaction. Thus, it is evident that the unsecured loan of Rs. 7,50,71,520/ received by the assessee from M/s KalpanikVyapaar Pvt. Ltd is not genuine. At appellate state, the appellant has failed to file any submission with credible evidence, only filing of appeal is not suffice to accept the claim of appellant. On the contrary AO has made analysis of the facts. The contention of the appellant as made during the assessment proceedings that Shri Narendra Shah and his wife Smt. Darshana Shah are the only directors of the said Company in which public holding is NIL, is found baseless.The fact remains the same that name was struck m the register of(99611-4, by the Registrar of Companies, Kolkata and the directors of the said company was also declared as Disqualified Directors w/s 164(2)(a) of the companies Act. In view of the overall facts discussed as above addition made of Rs. 7,50,71,520/- on account loan accepted from M/s KalpanikVyapaar Pt Ltd Is upheld. Therefore, this ground of appeal no. 1 is Dismissed. Shri Narendra S Shah 60 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 6.12 It is observed that the AO had placed on record the entire gamut of finding and there is no further requirement for elaboration. The fact cannot be denied that, that MsKalpanikVyapar Pvt. Ltd. has been removed/ struck off Companies by the Registrar of Companies, Kolkota and the directors of the said company have also been declared as Disqualified Directors and appellant was one of the Directors of the said company declared as disqualified director by ROC Kolkata. Filing urns of income on 15.11.2017, whereas the commission u/s 131(1)d) of the Act was issued on 27.10.2017 by AO, shows appellants meager efforts and further strengthens the bogus transaction of the appellant. Thus, it was clearly apaar Pt Ltd filed its returns of income, after the AO of the said Company started enquiries in response to commission u/s. 131 of the Act. In view of overall discussion, it can safely be concluded that the loan accepted by the appellant from M/s yapaar Put Ltd is not a genuine loan. The key ingredients of the transaction viz., identity, genuineness and creditworthiness of the transaction have remained unproved. The appellant has failed to submit any credible e undersigned. The appellant has shown casual approach towards appeal proceedings and failed to establish the genuineness of transaction. Thus, it is evident that the unsecured loan of Rs. 7,50,71,520/ received by the assessee from M/s Ltd is not genuine. At appellate state, the appellant has failed to file any submission with credible evidence, only filing of appeal is not suffice to accept the claim of appellant. On the contrary AO has made analysis appellant as made during the assessment proceedings that Shri Narendra Shah and his wife Smt. Darshana Shah are the only directors of the said Company in which public holding is NIL, is found baseless.The fact remains the same that name was struck 4, by the Registrar of Companies, Kolkata and the directors of the said company was also declared as Disqualified Directors w/s 164(2)(a) of the companies Act. In view of the overall facts discussed as on account loan accepted from M/s KalpanikVyapaar Pt Ltd Is upheld. Therefore, this ground of appeal no. 1 is Dismissed.” 24. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We f the assessee has filed confirmation from the said company. However, no income tax return or bank statement was filed the ld AO. Further, the said company was during relevant period stricken off or removed from the register of the registrar company. Before us, the Ld. Counsel of the assessee submitted that the said company has been revived by the National Company Law Tribunal (NCLT) vide order dated 14/01/2022 in CP No. 252/KB/2021. The relevant observation of the NCLT are reproduced as under: “1) This Company Petition has been filed by Mr. Narendra Shah Suryakant, one of the shareholders of M/S KALPANIK VYAPAAR PRIVATE LIMITED, u/s. 252(3) of the Companies Act, 2013 for restoration of name of the struck off company in the register of c Registrar of Companies, West Bengal. It is stated that the name of the Company was struck off on 30.06.2017. 2) It is contended that the Company had not filed the Financial Statements and Annual Returns of the Comp from the financial year ended 2013 2016-17, 2017 inadvertent mistake on part of the management and has produced copies of the said financial statements. Therefore, though the Company was running its Company did not file its Financial Statements and Annual Returns with the Registrar of Companies, West Bengal, for the relevant financial years and has produced copies of the said financial statements. IT Acknowledgement and Bank statement has also been produced. Upon the said contentions, the Ld. Counsel for the petitioner prayed for passing of an order for restoration of the name of the appellant company. ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We f the assessee has filed confirmation from the said company. However, no income tax return or bank statement was filed . Further, the said company was during relevant period off or removed from the register of the registrar company. Before us, the Ld. Counsel of the assessee submitted that the said company has been revived by the National Company Law vide order dated 14/01/2022 in CP No. 252/KB/2021. The relevant observation of the NCLT are s under: 1) This Company Petition has been filed by Mr. Narendra Shah Suryakant, one of the shareholders of M/S KALPANIK VYAPAAR PRIVATE LIMITED, u/s. 252(3) of the Companies Act, 2013 for restoration of name of the struck off company in the register of companies, maintained in the office of the Registrar of Companies, West Bengal. It is stated that the name of the Company was struck off on 30.06.2017. 2) It is contended that the Company had not filed the Financial Statements and Annual Returns of the Comp from the financial year ended 2013-14, 2014-15, 2015 17, 2017-18, 2018-19 and 2019-20 due to inadvertent mistake on part of the management and has produced copies of the said financial statements. Therefore, though the Company was running its business but the Company did not file its Financial Statements and Annual Returns with the Registrar of Companies, West Bengal, for the relevant financial years and has produced copies of the said financial statements. IT Acknowledgement and Bank has also been produced. Upon the said contentions, the Ld. Counsel for the petitioner prayed for passing of an order for restoration of the name of the appellant company. Shri Narendra S Shah 61 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that the assessee has filed confirmation from the said company. However, no income tax return or bank statement was filed before . Further, the said company was during relevant period off or removed from the register of the registrar of the company. Before us, the Ld. Counsel of the assessee submitted that the said company has been revived by the National Company Law vide order dated 14/01/2022 in CP No. 252/KB/2021. The relevant observation of the NCLT are 1) This Company Petition has been filed by Mr. Narendra Shah Suryakant, one of the shareholders of M/S KALPANIK VYAPAAR PRIVATE LIMITED, u/s. 252(3) of the Companies Act, 2013 for restoration of name of the struck off company ompanies, maintained in the office of the Registrar of Companies, West Bengal. It is stated that the name of the Company was struck off on 30.06.2017. 2) It is contended that the Company had not filed the Financial Statements and Annual Returns of the Company 15, 2015-16, 20 due to inadvertent mistake on part of the management and has produced copies of the said financial statements. Therefore, business but the Company did not file its Financial Statements and Annual Returns with the Registrar of Companies, West Bengal, for the relevant financial years and has produced copies of the said financial statements. IT Acknowledgement and Bank has also been produced. Upon the said contentions, the Ld. Counsel for the petitioner prayed for passing of an order for restoration of the name of the 3) Notice was issued to the Registrar of Companies, West Bengal. The Registrar of Co submitted its report at the Registry with copy to the petitioner. It was stated in the report that only after compliance of the requirements to be met under Section 248 of the Companies Act, 2013, Registrar of Companies, West Bengal has struck off the name of the petitioner company from the register maintained by the Registrar of Companies West Bengal. 4) ROC, West Bengal has not objected to this application for restoration of the name of the company. On perusal of the application, should be restored to the register. Therefore, this petition deserves sympathetic consideration. Accordingly, the present petition is allowed on the following terms: a) The Registrar of Companies, West Bengal, respondent herein, is directed to restore the original status of the petitioner company as if the name of the Company had not been struck off from the register of Companies with the resultant and consequential actions like changing status of petitioner company from 'struck off' to 'Active'. b) The Petitioner Company is directed to file all pending statutory documents) including Annual Accounts and Annual returns for the period 2013 2016-17, 2017 prescribed fees/additional fee/fine as decided by Registrar of Companies, West Bengal within 45 days from the date on which its name is restored on the register of companies maintained by the Registrar of Companies, West Bengal. c) The restoration of the C the payment of cost of Rs. 70,000 / Thousand only) through online payment in www.mca.gov.in under miscellaneous fee by mentioning particulars as "Payment of cost for restoration of company pursuant to orders of NCLT in CP No. 252/KB/2021". d) The petitioner is directed to deliver a certified copy of this order with Registrar of Companies, West Bengal within thirty days of the receipt of this order. ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 3) Notice was issued to the Registrar of Companies, West Bengal. The Registrar of Companies, West Bengal has submitted its report at the Registry with copy to the petitioner. It was stated in the report that only after compliance of the requirements to be met under Section 248 of the Companies Act, 2013, Registrar of Companies, West l has struck off the name of the petitioner company from the register maintained by the Registrar of Companies West Bengal. 4) ROC, West Bengal has not objected to this application for restoration of the name of the company. On perusal of the application, we are satisfied that the name of the company should be restored to the register. Therefore, this petition deserves sympathetic consideration. Accordingly, the present petition is allowed on the following terms:- a) The Registrar of Companies, West Bengal, respondent herein, is directed to restore the original status of the petitioner company as if the name of the Company had not been struck off from the register of Companies with the resultant and consequential actions like changing status r company from 'struck off' to 'Active'. b) The Petitioner Company is directed to file all pending statutory documents) including Annual Accounts and Annual returns for the period 2013-14, 2014-15, 2015 17, 2017-18, 2018-19 and 2019-20 along with prescribed fees/additional fee/fine as decided by Registrar of Companies, West Bengal within 45 days from the date on which its name is restored on the register of companies maintained by the Registrar of Companies, West Bengal. c) The restoration of the Company's name is also subject to the payment of cost of Rs. 70,000 /- (Rupees Seventy Thousand only) through online payment in www.mca.gov.in under miscellaneous fee by mentioning particulars as "Payment of cost for restoration of company pursuant to s of NCLT in CP No. 252/KB/2021". d) The petitioner is directed to deliver a certified copy of this order with Registrar of Companies, West Bengal within thirty days of the receipt of this order. Shri Narendra S Shah 62 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 3) Notice was issued to the Registrar of Companies, West mpanies, West Bengal has submitted its report at the Registry with copy to the petitioner. It was stated in the report that only after compliance of the requirements to be met under Section 248 of the Companies Act, 2013, Registrar of Companies, West l has struck off the name of the petitioner company from the register maintained by the Registrar of Companies 4) ROC, West Bengal has not objected to this application for restoration of the name of the company. On perusal of the we are satisfied that the name of the company should be restored to the register. Therefore, this petition deserves sympathetic consideration. Accordingly, the - a) The Registrar of Companies, West Bengal, the respondent herein, is directed to restore the original status of the petitioner company as if the name of the Company had not been struck off from the register of Companies with the resultant and consequential actions like changing status b) The Petitioner Company is directed to file all pending statutory documents) including Annual Accounts and 15, 2015-16, 20 along with prescribed fees/additional fee/fine as decided by Registrar of Companies, West Bengal within 45 days from the date on which its name is restored on the register of companies maintained by the Registrar of Companies, West Bengal. ompany's name is also subject to (Rupees Seventy Thousand only) through online payment in www.mca.gov.in under miscellaneous fee by mentioning particulars as "Payment of cost for restoration of company pursuant to d) The petitioner is directed to deliver a certified copy of this order with Registrar of Companies, West Bengal within e) On such delivery and after due compliance with the above directions, the Registrar of Companies, West Bengal is directed to publish the order in the Official Gazette under his office name and seal; f) This order is confined to the violations, which ultimately led to the impugned action of striking off the name o Company, and it will not come in the way of Registrar of Companies, West Bengal to take appropriate action(s) in accordance with law, for any other violations / offences, if any, committed by the petitioner company prior to or during the period the n 24.1 Thus, the said company is removed or struck off companies and it is being a live company. Assessing officer and l shell company by the SEBI is thus unsubstantiated fact and can’t be relied. The Assessing officer of the said company has duly verified the return of income filed by that company and in remand also the Assessing Officer could not point out any adverse fact other than allegation of being a shell company. made mainly for the reason that assessee company was stricken orremoved from the register of the (ROC). Since, the company has Company Law Tribunal on the prayer of the the finding of ld CIT(A) No. 1 of the appeal of the assessee is accordingly allowed. 25. The ground No. 2 of the appeal of the assessee relates to addition of Rs.29,29,800/ ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 e) On such delivery and after due compliance with the directions, the Registrar of Companies, West Bengal is directed to publish the order in the Official Gazette under his office name and seal; This order is confined to the violations, which ultimately led to the impugned action of striking off the name o Company, and it will not come in the way of Registrar of Companies, West Bengal to take appropriate action(s) in accordance with law, for any other violations / offences, if any, committed by the petitioner company prior to or during the period the name of the Company remained struck off. Thus, the said company is no more in the list of the companies or struck off from the register of the R and it is being a live company. The basis of the Assessing officer and ld CIT(A) that assessee has been held to be shell company by the SEBI is thus unsubstantiated fact and can’t be relied. The Assessing officer of the said company has duly verified the return of income filed by that company and in remand fficer could not point out any adverse fact other than allegation of being a shell company. The addition has been mainly for the reason that assessee company was stricken removed from the register of the Registrar of the compan the company has now been revived by the National Company Law Tribunal on the prayer of the company, the finding of ld CIT(A) and delete the addition made. No. 1 of the appeal of the assessee is accordingly allowed. No. 2 of the appeal of the assessee relates to addition of Rs.29,29,800/- made by the Ld. Assessing Officer u/s Shri Narendra S Shah 63 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 e) On such delivery and after due compliance with the directions, the Registrar of Companies, West Bengal is directed to publish the order in the Official Gazette under This order is confined to the violations, which ultimately led to the impugned action of striking off the name of the Company, and it will not come in the way of Registrar of Companies, West Bengal to take appropriate action(s) in accordance with law, for any other violations / offences, if any, committed by the petitioner company prior to or during ame of the Company remained struck off.” no more in the list of the companies Registrar of the The basis of the d CIT(A) that assessee has been held to be shell company by the SEBI is thus unsubstantiated fact and can’t be relied. The Assessing officer of the said company has duly verified the return of income filed by that company and in remand fficer could not point out any adverse fact other The addition has been mainly for the reason that assessee company was stricken off egistrar of the companies been revived by the National company, we set aside and delete the addition made. The ground No. 1 of the appeal of the assessee is accordingly allowed. No. 2 of the appeal of the assessee relates to made by the Ld. Assessing Officer u/s 43CA of the Act. The brief facts qua the issue in dispute are that the assessee was a trader of real estate properties during the relevant assessment year estate for consideration lower than the value adopted by the stamp duty valuation department as under: Unit No. Market Value C-6 63570 D-6 4640000 D-5 4979000 B-10 4015000 B-11 4015000 25.1 The Assessing Officer noted that in view of deeming provisions u/s 43CA of the Act assessee is less than the value as per the stamp valuation authority then value as stamp valuation consideration received assessee. Accordingly between the sale consideration value of the properties assessed by the stamp duty valuation authority for addition u/s 43CA of the Act. On further appeal, the Ld. CIT(A) also upheld the addition ob “8.2 from above, it can be concluded that he entire approach of the Assessing Officer is correct. I do not find any force in appellants claim that request of referring the matter to Valuation officer was not opted by AO. Other than the bold assertion that the sale consideration shown ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 43CA of the Act. The brief facts qua the issue in dispute are that the assessee was a trader of real estate properties during the sment year. The assessee sold certain units of real estate for consideration lower than the value adopted by the stamp department. The list of relevant units is reproduced Market Value Agreement Value Difference 6357000 6350000 4640000 3039000 1601000 4979000 4987200 4015000 3500000 4015000 3500000 Total 2929800 The Assessing Officer noted that in view of deeming provisions u/s 43CA of the Act,if the sale consideration reported assessee is less than the value as per the stamp valuation authority then value as stamp valuation shall be deemed to be consideration received as a result of transfer of property by the Accordingly, the Ld. Assessing Officer treated difference between the sale consideration reported by the assessee and the value of the properties assessed by the stamp duty valuation authority for addition u/s 43CA of the Act. On further appeal, the Ld. CIT(A) also upheld the addition observing as under: 8.2 from above, it can be concluded that he entire approach of the Assessing Officer is correct. I do not find any force in appellants claim that request of referring the matter to Valuation officer was not opted by AO. Other ld assertion that the sale consideration shown Shri Narendra S Shah 64 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 43CA of the Act. The brief facts qua the issue in dispute are that the assessee was a trader of real estate properties during the he assessee sold certain units of real estate for consideration lower than the value adopted by the stamp . The list of relevant units is reproduced Difference 7000 1601000 291800 515000 515000 2929800 The Assessing Officer noted that in view of deeming provisions reported by the assessee is less than the value as per the stamp valuation authority, shall be deemed to be sale as a result of transfer of property by the fficer treated difference by the assessee and the value of the properties assessed by the stamp duty valuation authority for addition u/s 43CA of the Act. On further appeal, the serving as under: 8.2 from above, it can be concluded that he entire approach of the Assessing Officer is correct. I do not find any force in appellants claim that request of referring the matter to Valuation officer was not opted by AO. Other ld assertion that the sale consideration shown by the appellant was correct value, nothing has been brought on record either before 10 or before undersigned by way of documentary evidences to substantiate his claim with respect to the difference in stamp d and market value. Therefore, it cannot be said that the value adopted by the stamp valuation authority was higher than the fair market value, at which, the land was sold by the assessee. Further, the assessee has also not rebutted the adoption of for the purpose of capital gain before the registering authorities. 8.3 As is well known, section SOC would enable the revenue to bring to tax by way of deemed capital gain difference between the stamp valuation and the s of a capital asset. For obvious reasons, this provision of section 50C would not apply in case of a builder for whom immovable property is in nature of stock capital asset. To overcome this difficulty, the legislature had inserted section 43CA under Finance Act, 2013 with effect from 1 tax the income arising out of sale of stock and stamp valuation of such stock would substitute the actual receipt thereof. The AO has rightly made the a section 43CA when the appellant has shown the sale consideration less than the Stamp duty valuation. It is observed that the AO had placed on record all facts of finding and there is no further requirement for elaboration. As well, appellant credible documentary evidence before the undersigned during the appellate proceedings.Moreover, appellant has not turned around to contradict the view of undersigned and discharged its onus by filing only piece of paper are not sufficient to change the mind of undersigned. In view of the above facts the claim of appellant cannor he arowed and addition made u/s.43CA of Income tax Act, is upheld. 26. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. Before us, the Ld. Counsel of the assessee has made two submissions ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 by the appellant was correct value, nothing has been brought on record either before 10 or before undersigned by way of documentary evidences to substantiate his claim with respect to the difference in stamp duty value and market value. Therefore, it cannot be said that the value adopted by the stamp valuation authority was higher than the fair market value, at which, the land was sold by the assessee. Further, the assessee has also not rebutted the adoption of sale value as per stamp valuation for the purpose of capital gain before the registering 8.3 As is well known, section SOC would enable the revenue to bring to tax by way of deemed capital gain difference between the stamp valuation and the s of a capital asset. For obvious reasons, this provision of section 50C would not apply in case of a builder for whom immovable property is in nature of stock-in-trade and not capital asset. To overcome this difficulty, the legislature d section 43CA under Finance Act, 2013 with effect from 1-4-2014. This provision enables the revenue to tax the income arising out of sale of stock and stamp valuation of such stock would substitute the actual receipt thereof. The AO has rightly made the addition under section 43CA when the appellant has shown the sale consideration less than the Stamp duty valuation. It is observed that the AO had placed on record all facts of finding and there is no further requirement for elaboration. As well, appellant has failed on its part to place any credible documentary evidence before the undersigned during the appellate proceedings.Moreover, appellant has not turned around to contradict the view of undersigned and discharged its onus by filing only piece of paper are not sufficient to change the mind of undersigned. In view of the above facts the claim of appellant cannor he arowed and addition made u/s.43CA of Income tax Act, is We have heard rival submission of the parties on the issue in e and perused the relevant material on record. Before us, the Ld. Counsel of the assessee has made two submissions Shri Narendra S Shah 65 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 by the appellant was correct value, nothing has been brought on record either before 10 or before undersigned by way of documentary evidences to substantiate his uty value and market value. Therefore, it cannot be said that the value adopted by the stamp valuation authority was higher than the fair market value, at which, the land was sold by the assessee. Further, the assessee has also not sale value as per stamp valuation for the purpose of capital gain before the registering 8.3 As is well known, section SOC would enable the revenue to bring to tax by way of deemed capital gain difference between the stamp valuation and the sale price of a capital asset. For obvious reasons, this provision of section 50C would not apply in case of a builder for whom trade and not capital asset. To overcome this difficulty, the legislature d section 43CA under Finance Act, 2013 with 2014. This provision enables the revenue to tax the income arising out of sale of stock and stamp valuation of such stock would substitute the actual receipt ddition under section 43CA when the appellant has shown the sale consideration less than the Stamp duty valuation. It is observed that the AO had placed on record all facts of finding and there is no further requirement for elaboration. has failed on its part to place any credible documentary evidence before the undersigned during the appellate proceedings.Moreover, appellant has not turned around to contradict the view of undersigned and discharged its onus by filing only piece of paper which are not sufficient to change the mind of undersigned. In view of the above facts the claim of appellant cannor he arowed and addition made u/s.43CA of Income tax Act, is We have heard rival submission of the parties on the issue in e and perused the relevant material on record. Before us, the Ld. Counsel of the assessee has made two submissions. Firstly, he submitted that legislature w.e.f. 01.04.2019 inserted a proviso to sub-section 1 of section 50C which provides that where the va adopted or assessed exceed 105% of the consideration property, then, consideration value of consideration. This permitted limit of 5% been further extended to 10% by the way of Finance Act, 2020. section 50C has been held to retrospective by the coordinate bench in the case of Maria Fennandes Cheryl reported in (2021) 187 ITD 738 (Mum) and in the case ofChandra Prakash Jhunjhunwala Vs DCIT in ITA No. 2351/Kol/2017. Therefore valuation and transaction value no addition is called for u/s 50C 10% is equally applicable to section 43CA of the Act in view both the provisions are pari materia and evident form the second proviso to section 43CA of the Act, which has 1/4/2019. The assessee requested that this aspect of 10% difference has not been examined by the lower authorities, therefore matter might be restored to the ld AO for deciding afresh. the Ld. Counsel of the assessee submitted agreement in respect of sale of units years and substantial payment was already received by the ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 submitted that legislature w.e.f. 01.04.2019 inserted a proviso to section 1 of section 50C which provides that where the va adopted or assessed by the stamp valuation authority does not of the consideration as a result of the transfer property, then, consideration so received shall be deemed to be full value of consideration. This permitted limit of 5% been further extended to 10% by the legislature w.e.f. way of Finance Act, 2020. The said amendment in provisions of section 50C has been held to retrospective by the coordinate bench in the case of Maria Fennandes Cheryl reported in (2021) 187 ITD 738 (Mum) and Tribunal, Kolkata Bench Chandra Prakash Jhunjhunwala Vs DCIT in ITA No. herefore, wherever difference in stamp valuation and transaction value of property is within limit of addition is called for u/s 50C of the Act. This permissible limit of 10% is equally applicable to section 43CA of the Act in view both the provisions are pari materia and evident form the second proviso to section 43CA of the Act, which has been introduced wef The assessee requested that this aspect of 10% difference has not been examined by the lower authorities, therefore matter might be restored to the ld AO for deciding afresh. the Ld. Counsel of the assessee submitted that there was a prior agreement in respect of sale of units, which was entered in earlier years and substantial payment was already received by the Shri Narendra S Shah 66 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 submitted that legislature w.e.f. 01.04.2019 inserted a proviso to section 1 of section 50C which provides that where the value valuation authority does not as a result of the transfer of so received shall be deemed to be full value of consideration. This permitted limit of 5% difference has legislature w.e.f. 1/4/2021 by The said amendment in provisions of section 50C has been held to retrospective by the decision of coordinate bench in the case of Maria Fennandes Cheryl Vs ITO , Kolkata Bench Chandra Prakash Jhunjhunwala Vs DCIT in ITA No. in stamp duty within limit of 10%, of the Act. This permissible limit of 10% is equally applicable to section 43CA of the Act in view being both the provisions are pari materia and evident form the second been introduced wef The assessee requested that this aspect of 10% difference has not been examined by the lower authorities, therefore matter might be restored to the ld AO for deciding afresh.Secondly, that there was a prior which was entered in earlier years and substantial payment was already received by the assessee. The Ld. Counsel referred to section 43CA(3) of the Act wherever prior agreement along with payme channel has been entered value as on the date of such agreement, should be considered as value for the purpose of stamp duty valuation. The Ld. Counsel submitted that in the case of the the purpose of stamp duty valuation should be taken as on the date the agreement entered into the above two prayers of the assessee, we feel it appropriate to restore this issue back to t verifying the contention of the assessee and decide the issue in accordance with law. The ground No. 2 of the appeal of the assessee is accordingly allowed for statistical purposes. 27. The ground No. 3 of the appeal penalty u/s 271(1)(c) of the same is dismissed as infructuous. 28. The ground No. 1 of the appeal of the Revenue relates to deletion of addition of Rs.18,50,000/ Assessing Officer u/s 69C of the Act. The relevant factual observations and finding of the Ld. CIT(A) on the issue in dispute is reproduced as under: 7.1 Appellate Decision: I have carefully considered the facts of the case, assessment order and material on rec AO has discussed this issue vide para 7 of assessment ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 assessee. The Ld. Counsel referred to section 43CA(3) of the Act wherever prior agreement along with payment through banking entered before the date of the registration, value as on the date of such agreement, should be considered as value for the purpose of stamp duty valuation. The Ld. Counsel submitted that in the case of the assessee accordingly the value for the purpose of stamp duty valuation should be taken as on the date the agreement entered into for the sale of the properties. In view of the above two prayers of the assessee, we feel it appropriate to restore this issue back to the file of the Assessing Officer for verifying the contention of the assessee and decide the issue in accordance with law. The ground No. 2 of the appeal of the assessee is accordingly allowed for statistical purposes. The ground No. 3 of the appeal is related to initiation of penalty u/s 271(1)(c) of the Act, which being premature in same is dismissed as infructuous. The ground No. 1 of the appeal of the Revenue relates to deletion of addition of Rs.18,50,000/- which was made by the sing Officer u/s 69C of the Act. The relevant factual observations and finding of the Ld. CIT(A) on the issue in dispute is reproduced as under: 7.1 Appellate Decision: I have carefully considered the facts of the case, assessment order and material on rec AO has discussed this issue vide para 7 of assessment Shri Narendra S Shah 67 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 assessee. The Ld. Counsel referred to section 43CA(3) of the Act nt through banking before the date of the registration, then value as on the date of such agreement, should be considered as value for the purpose of stamp duty valuation. The Ld. Counsel accordingly the value for the purpose of stamp duty valuation should be taken as on the date the sale of the properties. In view of the above two prayers of the assessee, we feel it appropriate to he file of the Assessing Officer for verifying the contention of the assessee and decide the issue in accordance with law. The ground No. 2 of the appeal of the assessee related to initiation of which being premature in nature, The ground No. 1 of the appeal of the Revenue relates to which was made by the sing Officer u/s 69C of the Act. The relevant factual observations and finding of the Ld. CIT(A) on the issue in dispute is 7.1 Appellate Decision: I have carefully considered the facts of the case, assessment order and material on record. The AO has discussed this issue vide para 7 of assessment order. As per AIR information received by AD, the appellant has made cash deposits in the savings bank account maintained with Kotak Mahindra Bank. On being asked to explain the source of cash assessee that the cash deposits so made are out of the cash withdrawals, in support of which, he filed extract of the cash book, as per which, the available cash balance in hand as on 28.02.2015 was Rs.38,32,528/ shown in the balance sheet as on 31.03.2015 was R$.2,93,004/ was not available in the file, the appellant was requested to file the cash book for the month of March, 2015 and reconcile the difference. In response to the same, the appellant filed the cash book for the whole year. It was noticed from the cash book of March, 2015 that other than two or three entries, all the entries in respect of the cash payments were made on 31.03.2015, the last raised a suspicion in the mind of the A.O. about the genuineness of the expenditure incurred. The appellant claimed to have made salary payments in cash on 31.03.2015 but no documentary evidences were furnished before the A to appellant was further requested to furnish the complete details of all the persons, to whom, he has paid salary. Further, in response to show cause the appellant submitted his explanation as under: "As regards on 31.03.2015towards salary, but not supported by any documentary evidences, hence raises a suspicion. In this regard, it is submitted that assessee's accountant has passed the entry on 31.03.2015 in respect of made to security guards for protecting various properties. Since the property has not been developed the expenses paid to security guard towards salary has been capitalized in respective property. In support of the same, please find herewith the property, wherein the amount has been capitalized as per Ex F. A perusal of which your good offices will appreciate that since expenses has not been claimed as revenue, but has genuinely been incurred and capitalize encroachment, no adverse view thereof should be taken and ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 order. As per AIR information received by AD, the appellant has made cash deposits in the savings bank account maintained with Kotak Mahindra Bank. On being asked to explain the source of cash deposits, it was submitted by the assessee that the cash deposits so made are out of the cash withdrawals, in support of which, he filed extract of the cash book, as per which, the available cash balance in hand as on 28.02.2015 was Rs.38,32,528/-, whereas the cash balance shown in the balance sheet as on 31.03.2015 was R$.2,93,004/-As the cash book for the month of March, 2015 was not available in the file, the appellant was requested to file the cash book for the month of March, 2015 and reconcile ference. In response to the same, the appellant filed the cash book for the whole year. It was noticed from the cash book of March, 2015 that other than two or three entries, all the entries in respect of the cash payments were made on 31.03.2015, the last date of financial year which raised a suspicion in the mind of the A.O. about the genuineness of the expenditure incurred. The appellant claimed to have made salary payments in cash on 31.03.2015 but no documentary evidences were furnished before the A to prove the genuineness of the expenditure. The appellant was further requested to furnish the complete details of all the persons, to whom, he has paid salary. Further, in response to show cause the appellant submitted his explanation as under: your query that cash payments have been made on 31.03.2015towards salary, but not supported by any documentary evidences, hence raises a suspicion. In this regard, it is submitted that assessee's accountant has passed the entry on 31.03.2015 in respect of made to security guards for protecting various properties. Since the property has not been developed the expenses paid to security guard towards salary has been capitalized in respective property. In support of the same, please find herewith the copy of the ledger account of respective property, wherein the amount has been capitalized as per Ex F. A perusal of which your good offices will appreciate that since expenses has not been claimed as revenue, but has genuinely been incurred and capitalized to protect it from encroachment, no adverse view thereof should be taken and Shri Narendra S Shah 68 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 order. As per AIR information received by AD, the appellant has made cash deposits in the savings bank account maintained with Kotak Mahindra Bank. On being asked to deposits, it was submitted by the assessee that the cash deposits so made are out of the cash withdrawals, in support of which, he filed extract of the cash book, as per which, the available cash balance in hand as on the cash balance shown in the balance sheet as on 31.03.2015 was As the cash book for the month of March, 2015 was not available in the file, the appellant was requested to file the cash book for the month of March, 2015 and reconcile ference. In response to the same, the appellant filed the cash book for the whole year. It was noticed from the cash book of March, 2015 that other than two or three entries, all the entries in respect of the cash payments were date of financial year which raised a suspicion in the mind of the A.O. about the genuineness of the expenditure incurred. The appellant claimed to have made salary payments in cash on 31.03.2015 but no documentary evidences were furnished prove the genuineness of the expenditure. The appellant was further requested to furnish the complete details of all the persons, to whom, he has paid salary. Further, in response to show cause the appellant submitted your query that cash payments have been made on 31.03.2015towards salary, but not supported by any documentary evidences, hence raises a suspicion. In this regard, it is submitted that assessee's accountant has passed the entry on 31.03.2015 in respect of payments made to security guards for protecting various properties. Since the property has not been developed the expenses paid to security guard towards salary has been capitalized in respective property. In support of the same, please find copy of the ledger account of respective property, wherein the amount has been capitalized as per Ex F. A perusal of which your good offices will appreciate that since expenses has not been claimed as revenue, but has d to protect it from encroachment, no adverse view thereof should be taken and no addition as proposed be made to the returned income. "Shri Narendra S. Shah, A.Y.2015 7.2 The explanation of the appellant was carefully considered by the A.0., but foun by observing as under: "Assessee has claimed the said expenses have not been claimed as revenue.The submissions made by the AR of the assessee are on wrong footing, prima facie, it is clearly observed from the P & L A/C that the an amount of Rs.20,63,000/ cannot be said that the expenditure has not been claimed as revenue. The assessee has also failed to furnish the salary register and complete details of persone, to whom, he has paid salaries at the last the assessee could not furnish any justifiable explanation on the situations led him to make the payment at the fag the financial year. Thus, the genuineness of the expenses remained unpr 7.3 Without prejudice to the above findings, it is further noticed that assessee has shown the plots of lands, in respect of which, he claimed to have paid the salary, have been shown in the balance sheet under the head"INVESTMENTS" and not the under PROGRESS O CLOSING WIP". The assessee is treating these assets as his personal assets only in the balance sheet and he has not converted these assets into stock in trade and thus the question of capitalizing the said expenditure does not arise. 7.4 On careful consideration, I donot find justification in the above action of the A.O. Once, the appellant has given an explanation regarding entries of cash payments (to the watchman of guarding various properties) as on 31.03.2015, the AO is re further verification before coming to the conclusion that the salary expenses of Rs. 20,63,000/ represent either cash expenses as claimed above or non genuine/bogus in nature. There is n that whether the plots/projects are represented as "Investment" or "work in progress", because what is ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 no addition as proposed be made to the returned income. "Shri Narendra S. Shah, A.Y.2015-16." 7.2 The explanation of the appellant was carefully considered by the A.0., but found to be not accepted by AO by observing as under: "Assessee has claimed the said expenses have not been claimed as revenue.The submissions made by the AR of the assessee are on wrong footing, prima facie, it is clearly observed from the P & L A/C that the assessee has debited an amount of Rs.20,63,000/- as salary expenses. Thus, it cannot be said that the expenditure has not been claimed as revenue. The assessee has also failed to furnish the salary register and complete details of persone, to whom, he has paid salaries at the last-day of the financial year. Further, the assessee could not furnish any justifiable explanation on the situations led him to make the payment at the fag the financial year. Thus, the genuineness of the expenses remained unproved. 7.3 Without prejudice to the above findings, it is further noticed that assessee has shown the plots of lands, in respect of which, he claimed to have paid the salary, have been shown in the balance sheet under the head"INVESTMENTS" and not the under the head "WORK IN PROGRESS O CLOSING WIP". The assessee is treating these assets as his personal assets only in the balance sheet and he has not converted these assets into stock in trade and thus the question of capitalizing the said expenditure does 7.4 On careful consideration, I donot find justification in the above action of the A.O. Once, the appellant has given an explanation regarding entries of cash payments (to the watchman of guarding various properties) as on 31.03.2015, the AO is required to examine the security guards or made further verification before coming to the conclusion that the salary expenses of Rs. 20,63,000/-debited in the P&L. A/c represent either cash expenses as claimed above or non genuine/bogus in nature. There is no relevance of the issue that whether the plots/projects are represented as "Investment" or "work in progress", because what is Shri Narendra S Shah 69 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 no addition as proposed be made to the returned income. 7.2 The explanation of the appellant was carefully d to be not accepted by AO "Assessee has claimed the said expenses have not been claimed as revenue.The submissions made by the AR of the assessee are on wrong footing, prima facie, it is clearly assessee has debited as salary expenses. Thus, it cannot be said that the expenditure has not been claimed as revenue. The assessee has also failed to furnish the salary register and complete details of persone, to whom, he has day of the financial year. Further, the assessee could not furnish any justifiable explanation on the situations led him to make the payment at the fag-end of the financial year. Thus, the genuineness of the expenses 7.3 Without prejudice to the above findings, it is further noticed that assessee has shown the plots of lands, in respect of which, he claimed to have paid the salary, have been shown in the balance sheet under the the head "WORK IN PROGRESS O CLOSING WIP". The assessee is treating these assets as his personal assets only in the balance sheet and he has not converted these assets into stock in trade and thus the question of capitalizing the said expenditure does 7.4 On careful consideration, I donot find justification in the above action of the A.O. Once, the appellant has given an explanation regarding entries of cash payments (to the watchman of guarding various properties) as on 31.03.2015, quired to examine the security guards or made further verification before coming to the conclusion that the debited in the P&L. A/c represent either cash expenses as claimed above or non- o relevance of the issue that whether the plots/projects are represented as "Investment" or "work in progress", because what is disallowed is the salary expenses already debited in the P&L A/c. Hence, the disallowance of Rs. 18,50,000/ deserved to be dele Allowed.” 29. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. The issue in dispute is regarding payment of salary expenses of Rs.18,50,000/ the assessee as incurred through cash in the month of March 2015. The assessee has shown source of the said expenditure through cash book produced Officer did not believe 31.03.2015, particularly, in respect of security guard etc. and held that the salary expenses the source of the said salary expenses is explained by way of cash book, there was no reason for the Assessing Officer addition for unexplained expenditure. expenditure is explained through cash book no error in the order of the Ld. CIT(A) on the issue in dispute and accordingly, we upho Revenue is accordingly dismissed. 30. The Ground No. 2 of the appeal of the Revenue disallowance of sundry creditors amounting to Rs.3,34,66,000/ invoking section 41(1) of the Act. The factual observation and ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 disallowed is the salary expenses already debited in the P&L A/c. Hence, the disallowance of Rs. 18,50,000/ deserved to be deleted. Thus, ground of appeal No. 2 is We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. The issue in of salary expenses of Rs.18,50,000/ s incurred through cash in the month of March 2015. The assessee has shown source of the said expenditure through d before the Assessing Officer. The Assessing believe the expenditure for salary made in cash on articularly, in respect of security guard etc. and held the salary expenses were unexplained. In our opinion, when the source of the said salary expenses is explained by way of cash there was no reason for the Assessing Officer addition for unexplained expenditure. When source of the s explained through cash book, in our opinion, there is no error in the order of the Ld. CIT(A) on the issue in dispute and old same. The ground No. 1 of the ap Revenue is accordingly dismissed. Ground No. 2 of the appeal of the Revenue disallowance of sundry creditors amounting to Rs.3,34,66,000/ invoking section 41(1) of the Act. The factual observation and Shri Narendra S Shah 70 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 disallowed is the salary expenses already debited in the P&L A/c. Hence, the disallowance of Rs. 18,50,000/- ted. Thus, ground of appeal No. 2 is We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. The issue in of salary expenses of Rs.18,50,000/- shown by s incurred through cash in the month of March 2015. The assessee has shown source of the said expenditure through before the Assessing Officer. The Assessing the expenditure for salary made in cash on articularly, in respect of security guard etc. and held unexplained. In our opinion, when the source of the said salary expenses is explained by way of cash there was no reason for the Assessing Officer, to make When source of the in our opinion, there is no error in the order of the Ld. CIT(A) on the issue in dispute and ld same. The ground No. 1 of the appeal of the Ground No. 2 of the appeal of the Revenue relates to disallowance of sundry creditors amounting to Rs.3,34,66,000/- invoking section 41(1) of the Act. The factual observation and finding of the Ld. CIT under: “9.1 Appellate Decision: I have carefully considered the facts of the case, assessment order and material on record. The issue raised is against the Non 10 from the deals sub shown sundry creditors to the tune of Rs.3,34,66,000/ books of M/ Siddhivinayak Developers, one of his proprietary concerns. During the course of assessment proceedings, the assessee was asked to furnish the of sundry creditors. In response to the same, the assessee submitted the name, address and PAN of the parties, but failed to give the corresponding amount due to the parties. Further, close scrutiny of the details revealed that o parties 5 parties were operated from the same premises having address at B Malad(E), Mumbai. a) M/s BloomdaleFinvest b) M/s Divy Dhwani Investment c) M/s Nayan Trade Resources d) M/s Tinal Pharmaceuticals e) M/s Lalita Exports f) M/s Plumeti Exports 9.2 The AO found that the above entities were primarily engaged in the business of investments, pharmaceuticals and exports and the assessee being a builder by profession, no rationale between the nature of business of the above entities, found the transactions to be suspicious. To further strengthen the case, the Inspector of charge was deputed to serve the notice us 133(6) of the Act personally wherein, he reported that he found the premises locked an the local enquiries with the watchmen of the building revealed that it was a pure residential complex of Raheja Township and no business activities being carried on from these ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 finding of the Ld. CIT(A) on the issue in dispute is reproduced as 9.1 Appellate Decision: I have carefully considered the facts of the case, assessment order and material on record. The issue raised is against the Non-Benuine Sundry Creditors. The 10 from the deals submited by appellant observed that it has shown sundry creditors to the tune of Rs.3,34,66,000/ books of M/ Siddhivinayak Developers, one of his proprietary concerns. During the course of assessment proceedings, the assessee was asked to furnish the complete details and aging of sundry creditors. In response to the same, the assessee submitted the name, address and PAN of the parties, but failed to give the corresponding amount due to the parties. Further, close scrutiny of the details revealed that o parties 5 parties were operated from the same premises having address at B-208, Shantivan-II, Raheja Township, Malad(E), Mumbai. a) M/s BloomdaleFinvest b) M/s Divy Dhwani Investment c) M/s Nayan Trade Resources d) M/s Tinal Pharmaceuticals Lalita Exports f) M/s Plumeti Exports 9.2 The AO found that the above entities were primarily engaged in the business of investments, pharmaceuticals and exports and the assessee being a builder by profession, no rationale between the nature of business of the assessee and the above entities, found the transactions to be suspicious. To further strengthen the case, the Inspector of charge was deputed to serve the notice us 133(6) of the Act personally wherein, he reported that he found the premises locked an the local enquiries with the watchmen of the building revealed that it was a pure residential complex of Raheja Township and no business activities being carried on from these Shri Narendra S Shah 71 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 (A) on the issue in dispute is reproduced as 9.1 Appellate Decision: I have carefully considered the facts of the case, assessment order and material on record. The Benuine Sundry Creditors. The mited by appellant observed that it has shown sundry creditors to the tune of Rs.3,34,66,000/- in the books of M/ Siddhivinayak Developers, one of his proprietary concerns. During the course of assessment proceedings, the complete details and aging of sundry creditors. In response to the same, the assessee submitted the name, address and PAN of the parties, but failed to give the corresponding amount due to the parties. Further, close scrutiny of the details revealed that out of 9 parties 5 parties were operated from the same premises II, Raheja Township, 9.2 The AO found that the above entities were primarily engaged in the business of investments, pharmaceuticals and exports and the assessee being a builder by profession, no the assessee and the above entities, found the transactions to be suspicious. To further strengthen the case, the Inspector of charge was deputed to serve the notice us 133(6) of the Act personally wherein, he reported that he found the premises locked and the local enquiries with the watchmen of the building revealed that it was a pure residential complex of Raheja Township and no business activities being carried on from these premises. Thus, the A0 come to the conclusion that all the entities were non e activities and all the sundry creditors were non thus the assessee need not to repay the liabilities. 9.3 Upon careful verification of the section 41(1) of the Act, the find the action of the AO not only a of the statute but unjustified and lacks merit. For the sake of clarity, the said provision is reproduced as under "41. (1) Where an allowance or deduction has been made in the assessment for any year in respect of loss, expend trading liability incurred by the assessee (hereinafter referred to as the first previous year (a)the first-mentioned person has obtained, whether in cashor in any other manner whatsoever, any amount i such19 loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation thereof, the amount obtained by such person or the value of benefit accruing to him shall be deemed to be profits and gains of business or profession and accordingly chargeable to income tax as the income of that previous year, whether the business or profession in respect of which the allowance or deduction has been made is in existence in that year or not; or (b)the successor in bu orin any other manner whatsoever, any amount in respect of which loss or expenditure was incurred by the first person or some benefit in respect of the trading liability referred to in clause (a) by way of rem thereof, the amount obtained by the successor in business or the value of benefit accruing to the successor in business shall be deemed to be profits and gains of the business or profession, and accordingly chargeable to income income of that previous year. Explanation 1 expression"loss or expenditure or some benefit in respect of any such trading liability by way of remission or cessation thereof" shall include the remission or cessat by a unilateral act by the first ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 premises. Thus, the A0 come to the conclusion that all the entities were non existing, not carrying out any business activities and all the sundry creditors were non- thus the assessee need not to repay the liabilities. 9.3 Upon careful verification of the section 41(1) of the Act, the find the action of the AO not only against the clear provisions of the statute but unjustified and lacks merit. For the sake of clarity, the said provision is reproduced as under- "41. (1) Where an allowance or deduction has been made in the assessment for any year in respect of loss, expend trading liability incurred by the assessee (hereinafter referred to as the first-mentioned person) and subsequently during any previous year mentioned person has obtained, whether in cashor in any other manner whatsoever, any amount i such19 loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation thereof, the amount obtained by such person or the value of benefit accruing to him shall be deemed to be profits and gains of iness or profession and accordingly chargeable to income tax as the income of that previous year, whether the business or profession in respect of which the allowance or deduction has been made is in existence in that year or not; or (b)the successor in business has obtained, whether in cash orin any other manner whatsoever, any amount in respect of which loss or expenditure was incurred by the first person or some benefit in respect of the trading liability referred to in clause (a) by way of remission or cessation thereof, the amount obtained by the successor in business or the value of benefit accruing to the successor in business shall be deemed to be profits and gains of the business or profession, and accordingly chargeable to income income of that previous year. Explanation 1-For the purposes of this sub- expression"loss or expenditure or some benefit in respect of any such trading liability by way of remission or cessation thereof" shall include the remission or cessation of any liability by a unilateral act by the first-mentioned person under clause Shri Narendra S Shah 72 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 premises. Thus, the A0 come to the conclusion that all the xisting, not carrying out any business -genuine and thus the assessee need not to repay the liabilities. 9.3 Upon careful verification of the section 41(1) of the Act, the gainst the clear provisions of the statute but unjustified and lacks merit. For the sake of "41. (1) Where an allowance or deduction has been made in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee (hereinafter referred mentioned person) and subsequently during any mentioned person has obtained, whether in cashor in any other manner whatsoever, any amount in respect of such19 loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation thereof, the amount obtained by such person or the value of benefit accruing to him shall be deemed to be profits and gains of iness or profession and accordingly chargeable to income- tax as the income of that previous year, whether the business or profession in respect of which the allowance or deduction has been made is in existence in that year or not; or siness has obtained, whether in cash orin any other manner whatsoever, any amount in respect of which loss or expenditure was incurred by the first-mentioned person or some benefit in respect of the trading liability ission or cessation thereof, the amount obtained by the successor in business or the value of benefit accruing to the successor in business shall be deemed to be profits and gains of the business or profession, and accordingly chargeable to income-tax as the -section, the expression"loss or expenditure or some benefit in respect of any such trading liability by way of remission or cessation ion of any liability mentioned person under clause (a) or the successor in business under Clause (b) of that sub section by way of writing off such liability in his accounts." 9.4 As can be seen from the provisions thatthe an assessee obtains by way of remission or cessation of a trading liabllity in a later year, in respect of which he has obtained a deduction in an earlier year in computing business income, is governed by section 41) which is specific provisi governing factual situation. Hon'ble Supreme Court in the case of Chief CIT v. Kesaria Tea Co. Lid12002] 122 Taxman 91 (SC), whiling examining the said provision has clearly held that in order to apply section 41(1), the following points are to be kept in view: (1) in the course of assessment for an earlier year, allowance or deduction has been made in respect of trading liability incurred by the assessee; (2) subsequently, a benefit is obtained in respect of such trading liability by way of remission or during the year in which such event occurred; (3) in that situation the value of the benefit accruing to the assessee is deemed to be the profits and gains of business which otherwise would not be his income; (4) such value of the benefi as the income of theprevious year in which such benefit was obtained. 9.5 Therefore, it has to be brought on record by the A0, before invoking provisions of sec. 41(1), that an allowance or deduction has been claimed in t respect of loss, expenditure or trading liability reflected therein. Hon'ble Apex Court in the case of Tirunelveli Motor Bus Service Co. (P.)Ltd. v. CIT [1970] 78 IT 55 (SC) has clearly held that it is not open to the Revenue to for charging the tax on the receipt by the assessee by refund or otherwise of such expenditure in a subsequent year, unless it is proved that an allowance or deduction has been made in the assessment in any previous year in respect o expenditure or trading liability. It is further seen that Hon'ble Gujarat High Court in the case of CIT. Bharat Iron & Steel ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 (a) or the successor in business under Clause (b) of that sub section by way of writing off such liability in his accounts." 9.4 As can be seen from the provisions thatthe benefit which an assessee obtains by way of remission or cessation of a trading liabllity in a later year, in respect of which he has obtained a deduction in an earlier year in computing business income, is governed by section 41) which is specific provisi governing factual situation. Hon'ble Supreme Court in the case of Chief CIT v. Kesaria Tea Co. Lid12002] 122 Taxman 91 (SC), whiling examining the said provision has clearly held that in order to apply section 41(1), the following points are to in view: (1) in the course of assessment for an earlier year, allowance or deduction has been made in respect of trading liability incurred by the assessee; (2) subsequently, a benefit is obtained in respect of such trading liability by way of remission or cessation thereof during the year in which such event occurred; (3) in that situation the value of the benefit accruing to the assessee is deemed to be the profits and gains of business which otherwise would not be his income; (4) such value of the benefit is made chargeable to income as the income of theprevious year in which such benefit was 9.5 Therefore, it has to be brought on record by the A0, before invoking provisions of sec. 41(1), that an allowance or deduction has been claimed in the in any previous year in respect of loss, expenditure or trading liability reflected therein. Hon'ble Apex Court in the case of Tirunelveli Motor Bus Service Co. (P.)Ltd. v. CIT [1970] 78 IT 55 (SC) has clearly held that it is not open to the Revenue to refer to section 41(1) for charging the tax on the receipt by the assessee by refund or otherwise of such expenditure in a subsequent year, unless it is proved that an allowance or deduction has been made in the assessment in any previous year in respect o expenditure or trading liability. It is further seen that Hon'ble Gujarat High Court in the case of CIT. Bharat Iron & Steel Shri Narendra S Shah 73 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 (a) or the successor in business under Clause (b) of that sub- section by way of writing off such liability in his accounts." benefit which an assessee obtains by way of remission or cessation of a trading liabllity in a later year, in respect of which he has obtained a deduction in an earlier year in computing business income, is governed by section 41) which is specific provision governing factual situation. Hon'ble Supreme Court in the case of Chief CIT v. Kesaria Tea Co. Lid12002] 122 Taxman 91 (SC), whiling examining the said provision has clearly held that in order to apply section 41(1), the following points are to (1) in the course of assessment for an earlier year, allowance or deduction has been made in respect of trading liability (2) subsequently, a benefit is obtained in respect of such cessation thereof (3) in that situation the value of the benefit accruing to the assessee is deemed to be the profits and gains of business t is made chargeable to income-tax as the income of theprevious year in which such benefit was 9.5 Therefore, it has to be brought on record by the A0, before invoking provisions of sec. 41(1), that an allowance or he in any previous year in respect of loss, expenditure or trading liability reflected therein. Hon'ble Apex Court in the case of Tirunelveli Motor Bus Service Co. (P.)Ltd. v. CIT [1970] 78 IT 55 (SC) has clearly refer to section 41(1) for charging the tax on the receipt by the assessee by refund or otherwise of such expenditure in a subsequent year, unless it is proved that an allowance or deduction has been made in the assessment in any previous year in respect of loss, expenditure or trading liability. It is further seen that Hon'ble Gujarat High Court in the case of CIT. Bharat Iron & Steel Industries [1993] 199 ITR 67 (Guj.) (FB) that Section 41(1) introduces a fiction. The fiction is an indivisible one. It can be enlarged by importing another fiction, namely, that if the amount was obtainable or receivable during the previous year, it must be deemed to have been obtained or received during that year. The only meaning that can be attached to the words 'obtained, whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure' incurred in any previous year, clearly refers to the actual receiving of the cash of that amount. The amount may be actually received or it may be adj adjustment entry or a credit note or in any other form when the cash or the equivalent of the cash can be said to have been received by the assessee. But it must be obtaining the actual amount which is contemplated by the Legislature whe it used the words has obtained, whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure in the past. 9.6 There is nothing on record which suggest that the appellant, in the instant case, has claimed or availed allowance or deduction to the extent of Rs.3,34,66,000/ reflected in the accounts as outstanding credits from the five parties mentioned in the order, in any previous year in respect of loss, expenditure or trading liability reflected therein. Hon'ble Delhi High Court in the case of Steel & General Mills Co. Ltd. V. CIT [1974] 96 IT 438 (Delhi) has clearly held that the burden is on department to prove that allowance/deduction has been given earlier "A refund obtained by the assessee will attract se only if an allowance or deduction had been given for this amount in the earlier assessment years. The burden lies upon the department to prove that an allowance or deduction had been given for this amount to the assessee in the earlier assessment years." 9.7 Unless and until, the A records a finding of the fact that the appellant has claimed such benefits in the preceding years, no such disallowance of outstanding balance is possible. There is no requirement in the act for detailed enquiry. As h AncherryPavooKakku [1986] 160 IT 88 (Ker.)section 41(1) does ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 Industries [1993] 199 ITR 67 (Guj.) (FB) that Section 41(1) introduces a fiction. The fiction is an indivisible one. It can be enlarged by importing another fiction, namely, that if the amount was obtainable or receivable during the previous year, it must be deemed to have been obtained or received during that year. The only meaning that can be attached to the words ed, whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure' incurred in any previous year, clearly refers to the actual receiving of the cash of that amount. The amount may be actually received or it may be adjusted by way of an adjustment entry or a credit note or in any other form when the cash or the equivalent of the cash can be said to have been received by the assessee. But it must be obtaining the actual amount which is contemplated by the Legislature whe it used the words has obtained, whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure in the past. 9.6 There is nothing on record which suggest that the appellant, in the instant case, has claimed or availed allowance or deduction to the extent of Rs.3,34,66,000/ reflected in the accounts as outstanding credits from the five parties mentioned in the order, in any previous year in respect of loss, expenditure or trading liability reflected therein. ble Delhi High Court in the case of Steel & General Mills Co. Ltd. V. CIT [1974] 96 IT 438 (Delhi) has clearly held that the burden is on department to prove that allowance/deduction has been given earlier "A refund obtained by the assessee will attract se only if an allowance or deduction had been given for this amount in the earlier assessment years. The burden lies upon the department to prove that an allowance or deduction had been given for this amount to the assessee in the earlier nt years." 9.7 Unless and until, the A records a finding of the fact that the appellant has claimed such benefits in the preceding years, no such disallowance of outstanding balance is possible. There is no requirement in the act for detailed enquiry. As held by Hon'ble Kerala High Court in CIT v. AncherryPavooKakku [1986] 160 IT 88 (Ker.)section 41(1) does Shri Narendra S Shah 74 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 Industries [1993] 199 ITR 67 (Guj.) (FB) that Section 41(1) introduces a fiction. The fiction is an indivisible one. It cannot be enlarged by importing another fiction, namely, that if the amount was obtainable or receivable during the previous year, it must be deemed to have been obtained or received during that year. The only meaning that can be attached to the words ed, whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure' incurred in any previous year, clearly refers to the actual receiving of the cash of that amount. The amount usted by way of an adjustment entry or a credit note or in any other form when the cash or the equivalent of the cash can be said to have been received by the assessee. But it must be obtaining the actual amount which is contemplated by the Legislature when it used the words has obtained, whether in cash or in any other manner whatsoever, any amount in respect of such loss 9.6 There is nothing on record which suggest that the appellant, in the instant case, has claimed or availedany allowance or deduction to the extent of Rs.3,34,66,000/- as reflected in the accounts as outstanding credits from the five parties mentioned in the order, in any previous year in respect of loss, expenditure or trading liability reflected therein. ble Delhi High Court in the case of Steel & General Mills Co. Ltd. V. CIT [1974] 96 IT 438 (Delhi) has clearly held that the burden is on department to prove that "A refund obtained by the assessee will attract section 41(1) only if an allowance or deduction had been given for this amount in the earlier assessment years. The burden lies upon the department to prove that an allowance or deduction had been given for this amount to the assessee in the earlier 9.7 Unless and until, the A records a finding of the fact that the appellant has claimed such benefits in the preceding years, no such disallowance of outstanding balance is possible. There is no requirement in the act for detailed eld by Hon'ble Kerala High Court in CIT v. AncherryPavooKakku [1986] 160 IT 88 (Ker.)section 41(1) does not warrant a detailed enquiry whereby an assessee can be nsalled upon to produce his books of account and other documents to establish his case, as in assessment; the allowance or deduction made inthat year. the assessment for any year can be ascertained from the order of assessment for 9.8Considering the totality of facts and circumstances of issue involved, in my consid made disallowance of Rs. 3,34,66,000/ provisions of sec. 414) of the Act. Hence, the said disallowance/addition is directed to be deleted. Thus, ground of appeal no. 4 is allowed. 31. We have heard rival s dispute and perused the relevant material on record. We find that the Assessing Officer has treated the sundry creditors appearing in the balance sheet as benefit arising due to the write off of the sundry creditors. The Assessing Officer issued notice u/s the Act and made local inquiries and found that those parties not available at the said address existing and hence were not genuine. of the Act cannot be invoked unilaterally and the Assessing Officer has to show as how the liability was no longer payable by the assessee and why assessee has not in the books of accounts of the assessee carried out by the Assessing Officer, therefore conditions of section 41(1) of the Act have not been Assessing Officer. Accordingly, we do not find any error in the order ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 not warrant a detailed enquiry whereby an assessee can be nsalled upon to produce his books of account and other documents to establish his case, as in the case of a regular assessment; the allowance or deduction made inthat year. the assessment for any year can be ascertained from the order of assessment for that year. 9.8Considering the totality of facts and circumstances of issue involved, in my considered opinion, the AO has incorrectly made disallowance of Rs. 3,34,66,000/-invoking the provisions of sec. 414) of the Act. Hence, the said disallowance/addition is directed to be deleted. Thus, ground of appeal no. 4 is allowed.” We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that the Assessing Officer has treated the sundry creditors appearing in the balance sheet as benefit arising due to the write off of the . The Assessing Officer issued notice u/s the Act and made local inquiries and found that those parties the said addresses, therefore those parties were not genuine. In our opinion, section 41(1) of the Act cannot be invoked unilaterally and the Assessing Officer as how the liability was no longer payable by the assessee and why assessee has not written off the sundry creditor in the books of accounts of the assessee. No such exercise by the Assessing Officer, therefore conditions of section 41(1) of the Act have not been Accordingly, we do not find any error in the order Shri Narendra S Shah 75 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 not warrant a detailed enquiry whereby an assessee can be nsalled upon to produce his books of account and other the case of a regular assessment; the allowance or deduction made inthat year. the assessment for any year can be ascertained from the 9.8Considering the totality of facts and circumstances of issue ered opinion, the AO has incorrectly invoking the provisions of sec. 414) of the Act. Hence, the said disallowance/addition is directed to be deleted. Thus, ground ubmission of the parties on the issue in dispute and perused the relevant material on record. We find that the Assessing Officer has treated the sundry creditors appearing in the balance sheet as benefit arising due to the write off of the . The Assessing Officer issued notice u/s 133(6) of the Act and made local inquiries and found that those parties were therefore those parties were not In our opinion, section 41(1) of the Act cannot be invoked unilaterally and the Assessing Officer as how the liability was no longer payable by the written off the sundry creditors . No such exercise has not by the Assessing Officer, therefore, the requisite conditions of section 41(1) of the Act have not been met by the Accordingly, we do not find any error in the order of the Ld. CIT(A) in deleting the addition. The gro is accordingly dismissed. 32. Now we take up the appeal of the assessee for assessment year 2016-17 having ITA No. 2004/Mum/2022. The grounds raised by the assessee are reproduced as under: 1. On the facts and in the circumstances of the ca in law, the Hon'ble CIT(A) erred in upholding the addition of Rs.8,53,000/ wrongly applying the provisions of section 43CA of the IT Act 1961 without appreciating that the said provisions are not applicable to the facts of the and the reason assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and rules made there under. 2. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the addition of Rs.54,25,00 wrongly disallowing the legitimate deduction claimed u/s 35(ji) of the IT Act 1961 and the reason assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and rules made there under. 3. On the facts and in the and in law, the Hon'ble CIT(A) erred in upholding the penalty initiated by the Ld AO u/s. 271(1)(c) of the IT Act 1961 and the reason assigned for doing so are wrong and contrary to the provision of Income Tax Act and rules ma 33. The facts and circumstances in relation to ground No. 1 of the appeal of the assessee, are assessee for assessment year 2015 mutatis mutandis. ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 n deleting the addition. The ground No. 2 Revenue is accordingly dismissed. Now we take up the appeal of the assessee for assessment year 17 having ITA No. 2004/Mum/2022. The grounds raised by the assessee are reproduced as under: On the facts and in the circumstances of the ca in law, the Hon'ble CIT(A) erred in upholding the addition of Rs.8,53,000/- made by the Ld A0 by wrongly applying the provisions of section 43CA of the IT Act 1961 without appreciating that the said provisions are not applicable to the facts of the and the reason assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and rules made there under. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the addition of Rs.54,25,000/- made by the Ld AO by wrongly disallowing the legitimate deduction claimed u/s 35(ji) of the IT Act 1961 and the reason assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and rules made there under. On the facts and in the NIL circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the penalty initiated by the Ld AO u/s. 271(1)(c) of the IT Act 1961 and the reason assigned for doing so are wrong and contrary to the provision of Income Tax Act and rules made there under. The facts and circumstances in relation to ground No. 1 of the assessee, are identical to ground No. 2 of appeal of the assessee for assessment year 2015-16, therefore, same is decided Shri Narendra S Shah 76 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 und No. 2 Revenue Now we take up the appeal of the assessee for assessment year 17 having ITA No. 2004/Mum/2022. The grounds raised by On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the made by the Ld A0 by wrongly applying the provisions of section 43CA of the IT Act 1961 without appreciating that the said provisions are not applicable to the facts of the case and the reason assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and rules On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the made by the Ld AO by wrongly disallowing the legitimate deduction claimed u/s 35(ji) of the IT Act 1961 and the reason assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and rules made there under. NIL circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the penalty initiated by the Ld AO u/s. 271(1)(c) of the IT Act 1961 and the reason assigned for doing so are wrong and contrary to the provision of Income Tax Act The facts and circumstances in relation to ground No. 1 of the ground No. 2 of appeal of the herefore, same is decided 34. In ground No. Rs.54,24,000/- made by the Assessing Officer disallowing the deduction u/s 35(ii) are that donation made by the assessee to two scientific research organization, firstly amounting to Rs.21,00,000/ Society amounting to Rs.10,00,000/ sustained the disallowance to the reason that the assessee failed to furnish requisite evidence purpose of section 35( CIT(A) is reproduced as under: 7.2Appellate Decision: case, assessment order and details filed This ground of appeal relates to disallowance of donation made to Scientific Research Organisation. The appellant has made donations to two different entities firstly, Vivekananda Yoga AnusandhanaSemsthana, Hyderabadamounting to Rs.21,00,000/ Hyderabad amounting to Rs. 10,00,000/ failed to submit all the details before AO the present addition was made. It is surprise to see that the appellant has returned a business income in nega Rs.24,97,453/ an amount of Rs. 31,00,000/ business income returned. Normally, the human tendency is to donate the amount less than its income. 7.3 It is worth mentioning response to remand report the appellant has contradicted with the view taken by AO. AO has discussed that one of the employees misused his position and funds were returned to appellant in cash. In contradiction to the above t has made plain statement that, during the year under consideration the appellant gave Rs.21,00,000/ ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 In ground No. 2, the Ld. CIT(A) has upheld the addition of made by the Assessing Officer disallowing the of the Act. The facts qua the issue in dispute are that donation made by the assessee to two scientific research rstly M/s Vivekanand Yoga AnusandhanSansthan, amounting to Rs.21,00,000/- and secondly, Rural Development Society amounting to Rs.10,00,000/-. The Ld. CIT(A) has mainly sustained the disallowance to the reason that the assessee failed to evidence to establish approval of the society for the purpose of section 35(ii) of the Act. The relevant finding of the Ld. CIT(A) is reproduced as under: 7.2Appellate Decision:-I have considered the facts of the case, assessment order and details filed by the appellant. This ground of appeal relates to disallowance of donation made to Scientific Research Organisation. The appellant has made donations to two different entities firstly, Vivekananda Yoga AnusandhanaSemsthana, Hyderabadamounting to 000/- and secondly, Rural Development Society, Hyderabad amounting to Rs. 10,00,000/-. Since appellant failed to submit all the details before AO the present addition was made. It is surprise to see that the appellant has returned a business income in negative figure at Rs.24,97,453/- and has claimed a deduction for donation of an amount of Rs. 31,00,000/- which is higher than the business income returned. Normally, the human tendency is to donate the amount less than its income. 7.3 It is worth mentioning here that in its rejoinder, in response to remand report the appellant has contradicted with the view taken by AO. AO has discussed that one of the employees misused his position and funds were returned to appellant in cash. In contradiction to the above the appellant has made plain statement that, during the year under consideration the appellant gave Rs.21,00,000/ Shri Narendra S Shah 77 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 2, the Ld. CIT(A) has upheld the addition of made by the Assessing Officer disallowing the he facts qua the issue in dispute are that donation made by the assessee to two scientific research Yoga AnusandhanSansthan, Rural Development . The Ld. CIT(A) has mainly sustained the disallowance to the reason that the assessee failed to to establish approval of the society for the ) of the Act. The relevant finding of the Ld. I have considered the facts of the by the appellant. This ground of appeal relates to disallowance of donation made to Scientific Research Organisation. The appellant has made donations to two different entities firstly, Vivekananda Yoga AnusandhanaSemsthana, Hyderabadamounting to and secondly, Rural Development Society, . Since appellant failed to submit all the details before AO the present addition was made. It is surprise to see that the appellant has tive figure at and has claimed a deduction for donation of which is higher than the business income returned. Normally, the human tendency is here that in its rejoinder, in response to remand report the appellant has contradicted with the view taken by AO. AO has discussed that one of the employees misused his position and funds were returned to he appellant has made plain statement that, during the year under consideration the appellant gave Rs.21,00,000/- to Vivekanand Yoga AnusandhanaSamsthana, Hyderabad by way of a/c payee cheque donation and the appellant is not concerned as far as irregulari reason that he has given the donation by drawing a/c payee cheque in favour of Vivekanand Yoga AnusandhanaSamasthana and the assessee is not aware of misuse of the position by employee. Further contended that there is not an iota returned in cash to assessee and as far as entries in the books of a/c of Trust and opening of bank a/c's by the employee are concerned assessee has no control hence having no implication as far as genuine donation concerned. Hence no comments are offered on this count. 7.4 From above it can be seen that, the appellant has replied in casual manner and no efforts are made to produce any material in the form of evidence at assessment stage as well at appellate proc accept the contention made by the appellant. Further, at assessment stage, in respect of Rural Development Society, Hyderabad the appellant was requested to produce proof of deduction claimed us 35(1) of the IT.A assessee failed to produce any additional evidence that the said societies are approved for the purposes of sub of Section 35 of the I.T. Act, 1961 for the F.Y.2015 the appellate proceedings also no cogent, vali credible evidence or material are produced before the undersigned. It is further observed that during the appellate proceedings, the appellant has relied upon certain judgements viz, Motilal DayabhaiIhaveri& Sons VS ACIT lin ITA No.3453/M/20 Series Pvt. Ltd.( ITA No.532/M/2019) and Kitchen Essentials VS ACIT (ITA No. 6672/M/2013). However, facts and ratio of these judgements are distinguishable. These judgements are related to withdraws of recognisation of t retrospective effect. present case is on account of non requisite documents to establish approval of the societies for the purpose of sec. 35() of the Act. These documents are not produced appellate proceedings. Hence, the disallowance deserved to be sustained. ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 Vivekanand Yoga AnusandhanaSamsthana, Hyderabad by way of a/c payee cheque donation and the appellant is not concerned as far as irregularities are concerned for the reason that he has given the donation by drawing a/c payee cheque in favour of Vivekanand Yoga AnusandhanaSamasthana and the assessee is not aware of misuse of the position by employee. Further contended that there is not an iota of evidence that the donation amount was returned in cash to assessee and as far as entries in the books of a/c of Trust and opening of bank a/c's by the employee are concerned assessee has no control hence having no implication as far as genuine donation concerned. Hence no comments are offered on this count. 7.4 From above it can be seen that, the appellant has replied in casual manner and no efforts are made to produce any material in the form of evidence at assessment stage as well at appellate proceedings. Therefore, I am not in position to accept the contention made by the appellant. Further, at assessment stage, in respect of Rural Development Society, Hyderabad the appellant was requested to produce proof of deduction claimed us 35(1) of the IT.Act, 1961. However, the assessee failed to produce any additional evidence that the said societies are approved for the purposes of sub of Section 35 of the I.T. Act, 1961 for the F.Y.2015 the appellate proceedings also no cogent, valid, reliable or credible evidence or material are produced before the undersigned. It is further observed that during the appellate proceedings, the appellant has relied upon certain judgements viz, Motilal DayabhaiIhaveri& Sons VS ACIT lin ITA No.3453/M/2018 & 1584/Mum/20191, Vora Financial Series Pvt. Ltd.( ITA No.532/M/2019) and Kitchen Essentials VS ACIT (ITA No. 6672/M/2013). However, facts and ratio of these judgements are distinguishable. These judgements are related to withdraws of recognisation of the institutions with retrospective effect.However, the disallowance in the present case is on account of non-furnishing of requisite documents to establish approval of the societies for the purpose of sec. 35() of the Act. These documents are not produced before the assessment or appellate proceedings. Hence, the disallowance deserved to be sustained. In view of the above facts the Shri Narendra S Shah 78 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 Vivekanand Yoga AnusandhanaSamsthana, Hyderabad by way of a/c payee cheque donation and the appellant is not ties are concerned for the reason that he has given the donation by drawing a/c payee cheque in favour of Vivekanand Yoga AnusandhanaSamasthana and the assessee is not aware of misuse of the position by employee. Further contended that of evidence that the donation amount was returned in cash to assessee and as far as entries in the books of a/c of Trust and opening of bank a/c's by the employee are concerned assessee has no control hence having no implication as far as genuine donation is concerned. Hence no comments are offered on this count. 7.4 From above it can be seen that, the appellant has replied in casual manner and no efforts are made to produce any material in the form of evidence at assessment stage as well eedings. Therefore, I am not in position to accept the contention made by the appellant. Further, at assessment stage, in respect of Rural Development Society, Hyderabad the appellant was requested to produce proof of ct, 1961. However, the assessee failed to produce any additional evidence that the said societies are approved for the purposes of sub-section () of Section 35 of the I.T. Act, 1961 for the F.Y.2015-16. During d, reliable or credible evidence or material are produced before the undersigned. It is further observed that during the appellate proceedings, the appellant has relied upon certain judgements viz, Motilal DayabhaiIhaveri& Sons VS ACIT lin 18 & 1584/Mum/20191, Vora Financial Series Pvt. Ltd.( ITA No.532/M/2019) and Kitchen Essentials VS ACIT (ITA No. 6672/M/2013). However, facts and ratio of these judgements are distinguishable. These judgements are he institutions with However, the disallowance in the furnishing of requisite documents to establish approval of the societies for the purpose of sec. 35() of the Act. These before the assessment or appellate proceedings. Hence, the disallowance In view of the above facts the claim of appellant cannot be allowed and addition made u/s.35(ii) of Income tax Act, is upheld. 35. Before us, the Ld. Counsel assessee is willing to produce the required documents and therefore, the matter may be restored to the file of the Ld. Assessing Officer. In view of the prayer of the assessee and in the interest of the substantial justice to the file of the Ld. Assessing Officer for verification of the requisite approvals of the societies for the purpose of section 35( and decide the issue in accordance with law. The ground No. the appeal of the assessee is accordingly allowed for statistical purposes. 36. The ground No. 3 Act, which being premature at this stage infructuous. 38. In the result, respectiv under: ITA No. Asst. Year 2006/M/2022 2009 2005/M/2022 2009 2566/M/2022 2013 2007/M/2022 2014 ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 claim of appellant cannot be allowed and addition made u/s.35(ii) of Income tax Act, is upheld.” Before us, the Ld. Counsel of the assessee submitted that the assessee is willing to produce the required documents and therefore, the matter may be restored to the file of the Ld. Assessing the prayer of the assessee and in the interest of ce, we feel appropriate to restore the issue back to the file of the Ld. Assessing Officer for verification of the requisite approvals of the societies for the purpose of section 35( and decide the issue in accordance with law. The ground No. the appeal of the assessee is accordingly allowed for statistical The ground No. 3 is in relation to penalty u/s 271(1)(c) of the premature at this stage, same is dismissed as respective appeals are disposed off finally as Asst. Year Appeal of the Assessee/Revenue 2009-10 Assessee’s Appeal Allowed for statistical purpose 2009-10 Assessee’s Appeal Allowed partly 2013-14 Revenue’s Appeal dismissed 2014-15 Assessee’s Appeal allowed Shri Narendra S Shah 79 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 claim of appellant cannot be allowed and addition made of the assessee submitted that the assessee is willing to produce the required documents and therefore, the matter may be restored to the file of the Ld. Assessing the prayer of the assessee and in the interest of we feel appropriate to restore the issue back to the file of the Ld. Assessing Officer for verification of the requisite approvals of the societies for the purpose of section 35(ii) of the Act and decide the issue in accordance with law. The ground No. 2 of the appeal of the assessee is accordingly allowed for statistical in relation to penalty u/s 271(1)(c) of the is dismissed as e appeals are disposed off finally as Result Allowed for statistical purpose Allowed partly dismissed allowed 2003/M/2022 2015 2315/M/2022 2015 2004/M/2022 2016 Order pronounced in the open Court on Sd/ (VIKAS AWASTHY JUDICIAL MEMBER Mumbai; Dated: 30/06/2023 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// ITA Nos. 2005 to 2007/M/ 2004/M/2004, 2566 & 2315/M/2022 2015-16 Assessee’s Appeal Allowed partly for statistical purpose 2015-16 Revenue’s Appeal dismissed 2016-17 Assessee’s Appeal Allowed for statistical purpose nounced in the open Court on 30/06/2023. Sd/- Sd/ VIKAS AWASTHY) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Shri Narendra S Shah 80 ITA Nos. 2005 to 2007/M/2022 & 2003 to 2004/M/2004, 2566 & 2315/M/2022 Allowed partly for statistical purpose dismissed Allowed for statistical purpose /06/2023. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai