M/S OPULENT TRADING & INVESTMENT PVT. LTD, MUMBAI V. ITO 10 (3) (2), MUMBAI

ITA 2814/MUM/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8093 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 04-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R SINDHU
• Keywords: Unexplained cash credit; Income from undisclosed sources; Accommodation entries; TDS; Set aside
• Section: 133(6); 131; 68

Judgement Text

1 ITAS 2813 & 2814/MUM/2018 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C, MUMBAI BEFORE SHRI G MANJUNATHA (ACCOUNTANT MEMBER) AND SHRI RAVISH SOOD (JUDICIAL MEMBER) ITA NO.2813/MUM/2018 - AY 2013-14 ITA NO.2814/MUM/2018 - AY 2014-15 M/S OPULENT TRADING & INVESTMENT PVT LTD, 138-A, CHANDAWADI, 2 ND FLOOR, FLAT NO.15, C.P. TANK ROAD, MUMBAI 400 004 PAN : AAACO2872M VS ITO-10(3)(2), MUMBAI APPELLANT RESPONDEDNT APPELLANT BY SHRI BHUPENDRA SHAH RESPONDENT BY SMT. R SINDHU DATE OF HEARING 06-02-2019 DATE OF PRONOUNCEMENT 29-03-2019 O R D E R PER G MANJUNATHA, AM : THESE TWO APPEALS FILED BY THE ASSESSEE ARE DIRECT ED AGAINST THE COMMON ORDER OF THE CIT(A)-17, MUMBAI DATED 28-03-2 018 AND THEY PERTAIN TO AYS 2013-14 & 2014-15. SINCE FACTS ARE IDENTICAL A ND ISSUES ARE COMMON AND 2 ITAS 2813 & 2814/MUM/2018 INTER-RELATED, FOR THE SAKE OF CONVENIENCE, THESE A PPEALS WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL, FOR THE RESPECTIVE ASSESSMENT YEARS:- ITA NO.2813/MUM/2018 (AY 2013-14) 1) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT-(A) ERRED IN TREATING RECEIPT OF UNSECURED LOAN AMOUNTI NG TO RS.50,00,0007- AS ACCOMMODATION ENTRY (UNEXPLAINED CASH CREDIT) U/S. 68 OF THE INCOME TAX ACT, 1961. THOUGH THE SAID LOAN HAS ALSO BEEN REPAID BY THE APPELLANT IN SUBSEQUENT YEARS. 2) THE LD. CIT-(A) ERRED IN DISALLOWING THE INTERE ST AMOUNT OF RS.2,38,561/- ON AFORESAID LOAN TREATING THE SAME AS BOGUS. 3) THE LD. CIT-(A) ERRED IN MAKING ADDITION ON ACCO UNT OF COMMISSION ON SHAM TRANSACTION OF LOAN @ 0.2 % BEING RS. 10,0007- ITA NO.2814/MUM/2018 (AY 2014-15) 1) THE LD. CIT-(A) ERRED IN DISALLOWING THE INTER EST EXPENDITURE OF RS.4,50,000/- INCURRED ON RAISING INTEREST BEARING UNSECURED LOAN FROM MEENAKSHI DIAMOND PRIVATE LIMITED TREATING THE SAME AS BOGUS. 3. THE BRIEF FACTS OF THE CASE EXTRACTED FROM ITA N O.2813/MUM/2018 FOR AY 2013-14 ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF DISTRIBUTORS, MERCHANT TRADERS, IMPORTERS, EXPORTER S AND TO BUY AND SELL, DISTRIBUTE MATERIALS, FILED ITS RETURN OF INCOME AT NIL. THE CASE HAS BEEN SELECTED FOR SCRUTINY AND NOTICES U/S 143(2) AND 14 2(1) OF THE INCOME-TAX ACT, 1961 WERE ISSUED. IN RESPONSE TO THE NOTICES, THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE APPEARED FROM TIME TO TIME AND FILED V ARIOUS DETAILS, AS CALLED FOR. 3 ITAS 2813 & 2814/MUM/2018 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAS OBTAINED UNSECURED LOANS FROM VARIOUS PARTIES. THEREFORE, IN ORDER TO VERIFY NATURE AND SOURCE OF CREDITS, CALLE D UPON THE ASSESSEE TO FILE COMPLETE DETAILS INCLUDING CONFIRMATIONS FROM THE P ARTIES. IN RESPONSE, VIDE LETTER DATED 29-01-2016, THE ASSESSEE HAS FURNISHED PARTY-WISE DETAILS OF THE LOAN. THE ASSESSEE ALSO FILED DETAILS OF INTEREST PAID ON SUCH LOANS INCLUDING COMPLIANCE WITH TDS PROVISIONS. THE AO, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, FURTHER NOTICED THAT INFORMATION WAS R ECEIVED FROM INVESTIGATION WING OF THE DEPARTMENT, AS PER WHICH THE ASSESSEE W AS ONE OF THE BENEFICIARIES OF ACCOMMODATION ENTRIES PROVIDED BY SHRI BHANWARLAL JAIN THROUGH WEB OF COMPANIES. ON VERIFICATION OF DETAI LS OF UNSECURED LOANS FILED BY THE ASSESSEE IT WAS NOTICED THAT THE INFORMATION RECEIVED FROM INVESTIGATION WING AND CONTENTS OF SUCH INFORMATION WAS MATCHED W ITH THE INFORMATION FURNISHED BY THE ASSESSEE. THEREFORE, CALLED UPON THE ASSESSEE TO FILE COMPLETE DETAILS OF LOAN TAKEN FROM M/S MEENAKSHI D IAMONDS PVT LTD, IN VIEW OF INFORMATION RECEIVED FROM INVESTIGATION WING. A NOTICE U/S 133(6) WAS ALSO ISSUED TO THE PRINCIPAL OFFICER OF M/S MEENAKSHI DI AMONDS PVT LTD. IN RESPONSE, M/S MEENAKSHI DIAMONDS PVT LTD, FILED LET TER ON 16-02-2016 ALONGWITH COPY OF LEDGER ACCOUNT, COPY OF PAN CARD, COPY OF ITR ALONGWITH COPY OF BANK STATEMENT. THE AO, IN ORDER TO ASCERT AIN CORRECTNESS OF DETAILS 4 ITAS 2813 & 2814/MUM/2018 FILED BY THE PARTY, ISSUED SUMMONS U/S 131 TO ATTEN D PERSONALLY TO JUSTIFY INFORMATION FURNISHED IN RESPONSE TO NOTICE U/S 133 (6). BUT, NOBODY APPEARED BEFORE THE AO. THE PARTY, HOWEVER, FILED SAME DETA ILS ONCE AGAIN ALONGWITH LETTER DATED 08-03-2016. THE AO, BASED ON THE INFO RMATION FURNISHED BY THE ASSESSEE COUPLED WITH FURTHER ENQUIRIES CONDUCTED D URING THE COURSE OF ASSESSMENT PROCEEDINGS IN LIGHT OF INFORMATION RECE IVED FROM DGIT(INV), CAME TO THE CONCLUSION THAT THE ASSESSEE HAS FAILED TO P ROVE PRIMARY ONUS TO ESTABLISH GENUINENESS OF TRANSACTION RECORDED IN IT S BOOKS OF ACCOUNT. SINCE THE PRIMARY FACTS WERE IN THE KNOWLEDGE OF THE ASSE SSEE, IT WAS THE DUTY OF THE ASSESSEE TO PROVIDE CORRECT AND COMPLETE DETAILS WI TH REGARD TO THE IMPUGNED TRANSACTIONS. ALTHOUGH ASSESSEE HAS FILED DETAILS ABOUT LOANS INCLUDING CONFIRMATION LETTERS, BUT WHEN SUMMONS WERE ISSUED TO THE PARTY, NOBODY APPEARED. THEREFORE, HE CAME TO THE CONCLUSION THA T UNSECURED LOAN RECEIVED FROM M/S MEENAKSHI DIAMONDS PVT LTD WHICH IS ONE OF THE BENAMI CONCERN OF BHANWARLAL JAIN IS A SHAM TRANSACTION USED TO RE-RO UTE ASSESSEES OWN FUNDS IN FORM OF UNSECURED LOAN AND ACCORDINGLY MADE ADDITIO N OF RS.50 LAKHS U/S 68 OF THE I.T. ACT, 1961. SIMILARLY, THE AO ALSO MADE AD DITION TOWARDS PURPORTED INTEREST PAYMENT TO SUCH UNSECURED LOAN ALONGWITH P ROBABLE COMMISSION PAID TO THE CONCERNS CONTROLLED BY SHRI BHANWARLAL JAIN @0.25% WHICH AMOUNTED TO RS.10,000. 5 ITAS 2813 & 2814/MUM/2018 4. AGGRIEVED BY THE ASSESSMENT ORDER, ASSESSEE PREF ERRED APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), ASSESSEE HAS FILED ELABORATE WRITTEN SUBMISSIONS ALONGWITH CERTAIN JUDICIAL PRECEDENTS WHICH HAVE BE EN REPRODUCED AT PARA 3 ON PAGES 3 TO 5 OF CIT(A)S ORDER. THE SUM AND SUBSTA NCE OF ARGUMENTS OF THE ASSESSEE BEFORE THE CIT(A) WERE THAT WHEN NECESSARY EVIDENCES WERE FILED BEFORE THE AO TO PROVE IDENTITY, GENUINENESS OF TRA NSACTIONS AND CREDITWORTHINESS OF THE PARTIES, MERELY FOR THE REA SON OF NON-APPEARANCE OF PARTIES IN RESPONSE TO SUMMONS U/S 131, NO ADVERSE INFERENCE CAN BE DRAWN AGAINST THE ASSESSEE TO HOLD THAT UNSECURED LOAN TA KEN FROM THE ABOVE PARTY IS A SHAM TRANSACTION WHICH WAS USED TO CONVERT ASSESS EES OWN UNACCOUNTED INCOME. THE LD.CIT(A), AFTER CONSIDERING SUBMISSIO NS OF THE ASSESSEE AND ALSO BY RELYING UPON VARIOUS JUDICIAL PRECEDENTS, HELD T HAT THE LENDER COMPANY WAS A SHELL COMPANY AND HAD NEITHER ANY FINANCIAL WORTH NOR SOURCE TO ADVANCE RS.50 LAKHS IN THE FORM OF LOAN. THE FACTS BROUGHT OUT BY THE AO IN LIGHT OF INFORMATION RECEIVED FROM DGIT (INV) HAS ALREADY CO NFIRMED THE MODUS OPERANDI OF M/S BHANWARILAL JAIN, WHO USED TO GIVE ACCOMMODATION ENTRIES OF UNSECURED LOANS TO VARIOUS PARTIES FOR A COMMISSION . ALTHOUGH THE ASSESSEE HAS FILED CONFIRMATION LETTER ALONGWITH ITR COPIES OF THE PARTY, BUT WHEN SUMMONS WERE ISSUED TO THE PRINCIPAL OFFICER OF THE COMPANY, NOBODY ATTENDED BEFORE THE AO TO JUSTIFY DOCUMENTS SUBMITT ED IN SUPPORT OF LOAN. NO 6 ITAS 2813 & 2814/MUM/2018 DOUBT, THE AMOUNT HAS BEEN RECEIVED THROUGH BANKING CHANNEL. THE ASSESSEE ALSO PAID INTEREST AND COMPLIED WITH TDS PROVISIONS . BUT THAT ITSELF WOULD NOT BE SUFFICIENT ENOUGH TO PROVE GENUINENESS OF TRANSA CTIONS, WHEN THE INVESTIGATION CONDUCTED DURING THE CURSE OF SEARCH IN CASE OF BHANWARLAL JAIN PROVED THE FACT THAT HE WAS INVOLVED IN PROVIDING A CCOMMODATION ENTRIES. THEREFORE, THE LD.CIT(A) CAME TO THE CONCLUSION THA T THE AO WAS RIGHT IN MAKING ADDITION TOWARDS UNSECURED LOAN ALONGWITH IN TEREST AND COMMISSION U/S 68 OF THE I.T. ACT AND HENCE, THERE IS NO REASO N TO INTERFERE WITH THE ORDER OF THE AO. AGGRIEVED BY THE ORDER OF LD. CIT(A), T HE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LD.AR FOR THE ASSESSEE SUBMITTED THAT THE LD .CIT(A) ERRED IN CONFIRMING ADDITION MADE BY THE AO TOWARDS UNSECURE D LOAN TAKEN FROM M/S MEENAKSHI DIAMONDS PVT LTD WITHOUT APPRECIATING FAC T THAT THE ASSESSEE HAS DISCHARGED THE IDENTITY, GENUINENESS OF TRANSACTION S AND CREDITWORTHINESS OF THE PARTIES. ONCE, THE INITIAL BURDEN CAST UPON TH E ASSESSEE HAS BEEN DISCHARGED BY FILING NECESSARY EVIDENCE, THE ONUS S HIFTS TO THE REVENUE TO PROVE OTHERWISE. THE AO, IGNORING ALL EVIDENCES FI LED BY THE ASSESSEE, MADE ADDITION TOWARDS UNSECURED LOAN TAKEN FROM M/S MEEN AKSHI DIAMONDS PVT LTD ONLY FOR THE REASON THAT THE COMPANY BELONGED TO SH RI BHANWARLAL JAIN GROUP OF COMPANIES AND DURING THE COURSE OF SEARCH PROCEE DINGS SHRI BHANWARLAL JAIN 7 ITAS 2813 & 2814/MUM/2018 ADMITTED OF ISSUING ACCOMMODATION ENTRIES IN FORM O F UNSECURED LOANS. THE LD.AR FURTHER SUBMITTED THAT AS PER THE PROVISIONS OF SECTION 68, THE ASSESSEE, AT THE BEST, CAN FILE DETAILS OF LOANS TAKEN FROM T HE PARTIES. IN ANY EVENT, THE PARTIES DID NOT APPEAR BEFORE THE AO IN RESPONSE TO SUMMONS U/S 131, THE ASSESSEE CANNOT BE HELD RESPONSIBLE FOR NON APPEARA NCE BECAUSE NON APPEARANCE BEFORE THE AO BY THE PARTIES IS NOT WITH IN THE CONTROL AND KNOWLEDGE OF THE ASSESSEE. IN THIS CASE, THE PARTI ES HAVE FILED COMPLETE DETAILS IN RESPONSE TO NOTICE U/S 133(6). THE ASSESSEE ALS O FILED SIMILAR DETAILS BEFORE THE AO. THE AO, WITHOUT BRINGING ON RECORD ANY ADV ERSE COMMENTS ON THE DOCUMENTS FILED BY THE ASSESSEE AS WELL AS THE CRED ITOR MADE ADDITIONS FOR THE SIMPLE REASON THAT PARTY NEVER APPEARED BEFORE AO I N RESPONSE TO SUMMONS U/S 131. IN THIS REGARD, HE RELIED UPON FOLLOWING JUDICIAL PRECEDENTS:- 1. RELIANCE CORPORATION ITA NO.4946/MUM/2016 2. KOMAL AGROTECH PVT LTD ITA NO.437/HYD/2016 3. SUPERLINE CONSTRUCTION PVT LTD AND SITARA PROPE RTIES PVT LTD ITA NO.3645/MUM/2014 4. SUPERTECH DIAMOND TOOLS (P) LTD ITA NO.74/2012 ( 2014) 45 TAXMANN.COM 204 5. VACMET PACKAGING (INDIA) PVT LTD (2014) 45 TAXM ANN.COM 473 6. APEX THERM PACKAGING (P) LTD (2014) 42 TAXMANN. COM 473 7. ORCHID INDUSTRIES PVT LTD ITA NO.1433/2014 8 ITAS 2813 & 2814/MUM/2018 8. KSS PETRON PVT LTD ITA NO.224/2014 9. ARCELI REALTY LTD 6492/MUM/2016 10. SHREEDHAM BUILDERS ITA NO.5589/MUM/2017 7. THE LD.DR, ON THE OTHER HAND, STRONGLY SUPPORTED ORDER OF THE LD.CIT(A). THE LD.DR FURTHER SUBMITTED THAT THE AO HAS BROUGHT OUT MODUS OPERANDI OF SHRI BHANWARLAL JAIN AND HIS ASSOCIATES WHICH IS FU RTHER SUPPORTED BY THE REPORT OF INVESTIGATION WING WHERE IT WAS CATEGORIC ALLY PROVED THAT SHRI BHANWARLAL JAIN WAS INVOLVED IN PROVIDING ACCOMMODA TION ENTRIES OF UNSECURED LOANS TO VARIOUS BENEFICIARIES FOR COMMIS SION. IN FACT, SHRI BHANWARLAL JAIN HIMSELF HAD ADMITTED IN HIS STATEME NT RECORDED U/S 132(4) OF THE INCOME-TAX ACT, 1961. THEREFORE, MERELY FOR TH E REASON THAT THE ASSESSEE HAS FILED CONFIRMATION FROM THE PARTY ALONGWITH OTH ER DETAILS, THE SHAM TRANSACTION BETWEEN THE PARTIES CANNOT BE CONSIDERE D AS GENUINE LOAN TRANSACTIONS UNDERTAKEN IN NORMAL COURSE OF BUSINES S, MORE PARTICULARLY, WHEN THE INFORMATION GATHERED DURING THE COURSE OF ASSES SMENT IS PROVED OTHERWISE. IN THIS REGARD, HE RELIED UPON THE DECISION OF HON BLE GUJARAT HIGH COURT IN THE CASE OF PAWANKUMAR SANGHVI VS ITO INCOME TAX APPEAL NO.1037 OF 2017 AND ALSO THE DECISION OF HONBLE SUPREME COURT IN THE C ASE OF PAWANKUMAR SANGHVI VS ITO IN SLP NO.10250 OF 2018 DATED 01-05-2018. 9 ITAS 2813 & 2814/MUM/2018 8. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES B ELOW. THE AO HAS MADE ADDITION TOWARDS UNSECURED LOAN TAKEN FROM M/S MEEN AKSHI DIAMONDS PVT LTD, WHICH IS ONE OF THE ASSOCIATE CONCERN OF M/S B HANWARLAL JAIN ON THE GROUND THAT THE TRANSACTIONS BETWEEN THE ASSESSEE A ND THE COMPANY IS A SHAM TRANSACTION WHICH WAS USED TO RE-ROUTE ASSESSEES O WN UNACCOUNTED INCOME IN FORM OF UNSECURED LOAN. THE AO CAME TO THE CONCLUS ION ON THE BASIS OF ENQUIRIES CONDUCTED DURING THE COURSE OF SEARCH COU PLED WITH REPORT OF DGIT(INV), AS PER WHICH DURING THE COURSE OF SEARCH IN THE CASE OF SHRI BHANWARLAL JAIN, HE HAS ADMITTED THE FACT OF INVOLV EMENT IN PROVIDING BOGUS UNSECURED LOAN FOR VARIOUS BENEFICIARIES FOR COMMIS SION. THE PROVISIONS OF SECTION 68 DEALS WITH A CASE WHERE ANY SUM FOUND CR EDITED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE FOR WHICH THE ASSESSEE OFFE RS NO EXPLANATION OR EXPLANATION OFFERED BY THE ASSESSEE IS NOT SATISFAC TORY TO THE AO, THEN, THE SUM FOUND CREDITED MAY BE TREATED AS INCOME OF THE ASSE SSEE FOR THAT YEAR. IF WE GO THROUGH THE FACTS BROUGHT OUT BY THE AO IN LIGHT OF PROVISIONS OF SECTION 68, WHETHER THE ASSESSEE HAS DISCHARGED ITS ONUS CAST U PON U/S 68 OF THE ACT OR NOT, HAS TO BE EXAMINED. NO DOUBT, THE ASSESSEE HA S FILED VARIOUS DETAILS IN RESPECT OF UNSECURED LOAN TAKEN FROM M/S MEENAKSHI DIAMONDS PVT LTD INCLUDING CONFIRMATION FROM THE PARTY, PAN, ITR ACK NOWLEDGMENT COPY AND 10 ITAS 2813 & 2814/MUM/2018 BANK STATEMENT. IN FACT, THE CREDITORS, M/S MEENAK SHI DIAMONDS PVT LTD HAD FILED SIMILAR DETAILS TO THE AO WHEN NOTICE U/S 133 (6) WAS ISSUED. BUT, WHEN SUMMONS U/S 131 WAS ISSUED TO THE PRINCIPAL OFFICER OF M/S MEENAKSHI DIAMONDS PVT LTD, NOBODY ATTENDED BEFORE THE AO, BU T SAME DOCUMENTS WHICH WERE FILED IN RESPONSE TO NOTICE U/S 133(6) F ILED ONCE AGAIN BEFORE THE AO. UNDER THESE FACTS, WHEN WE EXAMINE THE CREDITS FOUND IN THE FORM OF UNSECURED LOAN TAKEN FROM M/S MEENAKSHI DIAMONDS PV T LTD, CAN WE SAY THE ASSESSEE HAS DISCHARGED IDENTITY, GENUINENESS OF TR ANSACTION AND CREDITWORTHINESS OF THE PARTIES. THE ASSESSEE HAS FILED COMPLETE DETAILS INCLUDING CONFIRMATION. WHEN WE GO BY THE LIST OF DOCUMENTS FILED BY THE ASSESSEE, THERE IS NO DOUBT, THE ASSESSEE HAS FILED NECESSARY DETAILS TO PROVE THE IDENTITY OF THE PARTIES. WHEN WE GO BY THE FIN DINGS RECORDED BY THE AO IN LIGHT OF ENQUIRIES CONDUCTED DURING THE COURSE OF A SSESSMENT, IT IS DIFFICULT TO SAY THAT THE ASSESSEE HAS PROVED IDENTITY OF THE PA RTIES BECAUSE WHEN SUMMONS U/S 131 WAS ISSUED, NOBODY APPEARED BEFORE THE AO. THEREFORE, THERE IS SUSPICION ABOUT THE IDENTITY OF THE PARTY. 9. COMING TO GENUINENESS OF TRANSACTIONS. NO DOUBT , THE ASSESSEE HAS FILED DETAILS OF PAN, ITR ACKNOWLEDGEMENT AND BANK STATE MENT OF THE PARTY. WHEN WE GO BY THE DOCUMENTS FILED BY THE ASSESSEE, NO DO UBT, UNSECURED LOAN HAS BEEN TAKEN THROUGH PROPER BANKING CHANNEL. INTERES T HAS BEEN PAID AND TDS 11 ITAS 2813 & 2814/MUM/2018 PROVISIONS HAVE BEEN COMPLIED WITH. BUT WHEN WE CO NSIDER THE FACTS BROUGHT OUT THE BY THE AO IN LIGHT OF REPORT OF DGIT(INV), IT IS VERY DIFFICULT TO ACCEPT THE ARGUMENTS OF THE ASSESSEE THAT THE TRANSACTIONS IS GENUINE BECAUSE, SHRI BHANWARLAL JAIN DURING THE COURSE OF SEARCH HAS ADM ITTED THAT HE HAD ISSUED BOGUS UNSECURED LOAN ENTRIES. THIS FACT IS FURTHER STRENGTHENED BY THE FINANCIAL STATEMENT OF THE CREDITOR, WHERE THE COMPANY DOES N OT HAVE SUFFICIENT SOURCE OF INCOME TO EXPLAIN SUCH A HUGE AMOUNT OF UNSECURE D LOAN GIVEN TO THE ASSESSEE. WHEN WE ANALYSE ALL THESE ASPECTS IN THE LIGHT OF CLAIM OF THE ASSESSEE WITH THE UNSECURED LOAN TAKEN FROM M/S ME ENAKSHI DIAMONDS PVT LTD, A STRONG SUSPICION ARISES ABOUT THE IDENTITY A ND GENUINENESS OF TRANSACTIONS, MORE PARTICULARLY, WHEN NOBODY APPEAR ED IN RESPONSE TO SUMMONS U/S 131. THEREFORE, WE ARE OF THE CONSIDER ED VIEW THAT THERE IS NO MERIT IN THE ARGUMENTS OF THE ASSESSEE THAT UNSECUR ED LOAN TAKEN FROM M/S MEENAKSHI DIAMONDS PVT LTD IS A GENUINE TRANSACTION MERELY FOR THE REASON THAT SUCH LOAN HAS BEEN TAKEN THROUGH PROPER BANKIN G CHANNEL AND ALSO INTEREST HAS BEEN PAID AFTER DEDUCTING NECESSARY TD S. 10. COMING TO THE CASE LAWS RELIED UPON BY THE ASSE SSEE. THE ASSESSEE HAS RELIED UPON PLETHORA OF JUDICIAL PRECEDENTS INCLUDI NG THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF ORCHID INDUSTRIES PVT LTD (SUPRA). WE HAVE GONE THROUGH THE CASE LAWS RELIED UPON BY THE ASSES SEE IN LIGHT OF FACTS 12 ITAS 2813 & 2814/MUM/2018 BROUGHT OUT BY THE AO DURING ASSESSMENT PROCEEDINGS AND FIND THAT ALTHOUGH SOME OF THE CASE LAWS REFERRED TO BY THE ASSESSEE H AS CONSIDERED THE CREDITS IN LIGHT OF EVIDENCE FILED BY THE ASSESSEE TO COME TO THE CONCLUSION THAT ONCE PRIMARY EVIDENCE HAS BEEN FILED TO PROVE IDENTITY, THEN THERE IS NO REASON FOR THE AO TO MAKE ADDITION IN RESPECT OF LOANS OR SHAR E CAPITAL IN THE HANDS OF THE ASSESSEE, BUT THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THE ASSESSMENT OF INDIVIDUAL CREDITORS. IN THIS CASE, THE FACTS ARE SLIGHTLY DIFFERENT FROM THE FACTS OF THOSE CASE LAWS CONSIDERED BY HONBLE BOMBAY HIG H COURT INASMUCH AS THE AO HAS CARRIED OUT FURTHER ENQUIRIES BY ISSUING SUM MONS U/S 131 FOR WHICH NO COMPLIANCE WAS MADE BY THE CREDITOR. THEREFORE, TH E CASE LAWS RELIED UPON BY THE ASSESSEE HAVE NOT BEEN CONSIDERED AS APPLICABLE TO THE FACTS OF THE ASSESSEES CASE. 11. SIMILARLY, THE LD.DR HAS RELIED UPON THE DECISI ON OF HONBLE GUJARAT HIGH COURT IN THE CASE OF PAWANKUMAR SANGHVI VS ITO (SUP RA), WHERE THE HONBLE HIGH COURT HAS CONSIDERED THE ISSUE IN LIGHT OF FAC TS BROUGHT OUT BY THE AO IN CASE OF UNSECURED LOANS TAKEN FROM M/S BHANWARLAL J AIN GROUP OF COMPANIES. THE HONBLE HIGH COURT, AFTER CONSIDERING RELEVANT FACTS HELD THAT ON PERUSAL OF THE ORDERS ON RECORD AND IN PARTICULAR THE ORDER OF THE TRIBUNAL WOULD MAKE IT CLEAR THAT THE ENTIRE ISSUE IS BASED ON APPRECIATIO N OF EVIDENCE ON RECORD AND THUS FACTUAL IN NATURE. THE TRIBUNAL HAS GIVEN ELA BORATE REASONS TO COME TO 13 ITAS 2813 & 2814/MUM/2018 THE CONCLUSION THAT THE ENTIRE TRANSACTION WAS NOT GENUINE. IN ABSENCE OF ANY PERVERSITY, WE DO NOT SEE ANY REASON TO INTERFERE W ITH THE ORDER OF THE TRIBUNAL. 12. IN THIS VIEW OF THE MATTER AND HAVING CONSIDERE D THE CASE LAWS DISCUSSED HEREINABOVE, WE ARE OF THE CONSIDERED VIEW THAT IT IS DIFFICULT TO ACCEPT THE ARGUMENTS OF THE ASSESSEE THAT UNSECURED LOAN TAKEN FROM M/S MEENAKSHI DIAMONDS PVT LTD IS A GENUINE TRANSACTION FIRSTLY F OR THE REASON THAT SUCH LOAN HAS BEEN TAKEN THROUGH PROPER BANKING CHANNEL AND INTEREST HAS BEEN PAID ON SUCH LOAN IN COMPLIANCE WITH TDS PROVISIONS, MORE P ARTICULARLY, WHEN THE FACTS GATHERED DURING ASSESSMENT PROCEEDINGS PROVE OTHERW ISE. AT THE SAME TIME, THE AO HAS ALSO NOT COMPLETED HIS INVESTIGATION TO REACH TO A CONCLUSION THAT IT IS A SHAM TRANSACTION BECAUSE THE AO HAS HEAVILY RE LIED UPON NON APPEARANCE OF THE ASSESSEE IN RESPONSE TO SUMMONS U/S 131. TH EREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE ISSUE NEEDS TO BE RE-EXAMI NED BY THE AO IN THE LIGHT OF THE CLAIM OF THE ASSESSEE THAT TRANSACTION BETWE EN PARTIES ARE GENUINE TRANSACTION AND THAT THE IDENTITY OF THE PARTY HAS NOT BEEN DISPUTED. HENCE, WE SET ASIDE THE ISSUE TO THE FILE OF THE AO AND DI RECT HIM TO CAUSE NECESSARY ENQUIRIES IN THE LIGHT OF OUR DISCUSSION HEREINABOV E WITH A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 14 ITAS 2813 & 2814/MUM/2018 13. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED, FOR STATISTICAL PURPOSE. ITA NO.2814/MUM/2018 (AY 2014-15) 14. IN THIS APPEAL, THE ISSUE IS INTER-CONNECTED TO THE ISSUE WHICH WE HAVE ALREADY DISCUSSED AND DECIDED IN ITA NO.2813/MUM/20 18. IN THIS CASE, THE AO HAS MADE ADDITION TOWARDS INTEREST PAID ON UNSECURE D LOAN TAKEN FROM M/S MEENAKSHI DIAMONDS PVT LTD ON THE GROUND THAT THE T RANSACTION BETWEEN THE PARTIES IS A SHAM TRANSACTION. SINCE WE HAVE SET A SIDE THE ISSUE OF UNSECURED LOAN TAKEN FROM M/S MEENAKSHI DIAMONDS PVT LTD IN E ARLIER YEAR, THIS ISSUE ALSO NEEDS TO GO BACK TO THE AO TO DECIDE AFRESH IN LIGHT OF OUR FINDINGS GIVEN HEREINABOVE IN PRECEDING PARAGRAPHS IN ITA NO.2813/ MUM/2018. THEREFORE, WE SET ASIDE THE ISSUE TO THE FILE OF THE AO FOR DE NOVO DECISION. 15. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED, FOR STATISTICAL PURPOSE. 16. AS A RESULT, BOTH THE APPEALS FILED BY THE ASSE SSEE ARE TREATED AS ALLOWED, FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 29 -03-20 19. SD/- SD/- (RAVISH SOOD) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 29 TH MARCH, 2019 15 ITAS 2813 & 2814/MUM/2018 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI