NISA INDUSTRIAL SERVICES PVT. LTD., MUMBAI V. ACIT- WD -10(3)(1), MUMBAI

ITA 3171/MUM/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2498 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 14-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAVITA P KAUSHIK DR VIRTUAL
• Keywords: Unexplained cash credit; Unexplained expenditure; Opportunity of cross examination; Source of fund; Corroborative evidences; Accommodation entries; Onus to prove; Sham transactions; Bogus loan; Borrowed satisfaction; TDS
• Section: 69C; 143(3); 133(6); 37(1); 251; 143(2); 64; 72; 13; 119; 22; 131; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI C. N. PRASAD, JM & SHRI S. RIFAUR RAHMAN, AM I.T.A. NO. 3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., 19 TH FLOOR, LOTUS GRANDUAR BUILDING VEERA DESAI RAOD EXTN ., OPP. COUNTRY CLUB, ANDHERI (W) MUMBAI 400 053 / VS. ACIT - 10(3)(1) R.NO. 217, 2 ND FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI 400 020 PAN NO. AAACN1283H ( APPELLANT ) : RESPONDENT ) APPELLANT BY : SHRI VIMAL PUNMIYA , AR RESPONDENT BY : MS. KAVITA P. KAUSHIK, DR VIRTUAL DATE OF HEARING : 20.10.2020 DATE OF PRONOUNCEMENT : 24 .11.2020 O R D E R PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER: 1. THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME - TAX (APPEALS) - 17 IN SHORT REFERRED AS LD. CIT(A), MUMBAI DATED 20.03.2018 FOR ASSESSMENT YEAR (IN SHORT AY) 2014 - 15. 2. THE BRIEF FACTS OF THE CASE ARE, ASSESS EE FILED ITS RETURN OF INCOME ON 29.11.2014 DECLARING TOTAL INCOME AT 7, 19,75, 470/ . T HE RETURN OF INCOME WAS PROCESSED UNDER SECTION 143 (1) OF THE INCOME TAX ACT 1961 2 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., (IN SHORT ACT). THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT AND NOTICE S UNDER SECT ION 143(2) AND 142 (1) OF THE A CT WAS ISSUED AND SERVED ON THE ASSESSEE. IN RESPONSE AR OF THE ASSESSEE ATTENDED AND FILED THE RELEVANT INFORMATION AS CALLED FOR. 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PROVIDING SECURITY PERSONALS CONSISTING OF SECURITY GUARDS, SUPERVISOR, GUNMAN, DETECTIVES ET C., TO VARIOUS COMPANIES, INDUSTRIES, INDIVIDUALS ET C. DURING THE ASSESSMENT PROCEEDINGS, AO OBSERVED FROM THE BALANCE SHEET AND AUDIT REPORT SUBMITTED BY THE ASSESSEE THAT ASSESSEE HA S TAKEN UNSECURED L OANS OF 6,12,20, 147/ UNDER THE HEAD UNSECURED LOANS FROM THE CORPORATE S . THE DETAILS OF UNSECURED LOAN ARE GIVEN BELOW: NAME ADDRESS PAN AMOUNT OF LOAN OR DEPOSIT MAXIMUM BALANCE O/S SQUARED UP APRATEEM GEMS PVT LTD M - 4, FLOOR MAZZ, NEW ANANTBHAVAN, MASJID,CHINCHBUNDER MUMBAI AAKCA 7424R 25,57,144 25,00,000 NO BABA BHOOTHNATH NIRMAN PVT LTD MARTIN BURN HOUSE, 3 RD FLOOR ,ROOM NO 326, 1RN MUKHERJEE RD, KOLKATA 700001 AALCS 8277P 97,93,057 50,00,000 NO DAFF ODIL TRADERS PVT LTD 31/1H BEADON ROW KOLKATA - 700001 AAECD 3872E 50,45,863 50,00,000 NO INDIAN INFOTECH AND SOFTWARE P VT . L TD ., D - 207, CRYSTAL PLAZA, NEW LINK ROAD, OPPOSITE INFINITY MALL, ANDHERI(W),MUMBAI AAACI 0350E 1,02,63,342 50,00,000 NO POKHRANA IMPEX PVT LTD MEHTA MANSION, 1 ST FLOOR, JAGANNATH SHANKAR SHETH ROAD, MUMBAI - 400004 AABCP7359P 25,54,370 25,00,000 NO SURAKSHA PROJECTS , PVT LTD 16B, PHASE IV, I.D.A. PATANCHERU , MEDAK DISTRICT, PATANCHERU, TELANGANA AANCS3042A 53,92,524 43,00,000 NO 3 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., NAME ADDRESS PAN AMOUNT OF LOAN OR DEPOSIT MAXIMUM BALANCE O/S SQUARED UP VALLABH DIAMONDS PVT LTD OFFICE NO 307, NAVRATAN CHAMBERS, BHOJABHAI NI SHERI, MAHIDHARPURA, SURAT - 395003 AAECV4179L 2,56,13,847 30,00,000 NO TOTAL 6,12,20,147 4. DURING THE PROCEEDINGS, ASSESSEE WAS ASKED TO FILE THE DETAILS OF UNSECURED LOANS RECEIVED IN ORDER TO VERIFY THE IDENTITY, GENUINENESS AND CREDITWORTHINESS, ACCORDINGLY WAS ASKED TO SUBMIT THEIR IT RETURNS, BANK STATEMENTS AND FINANCIALS. IN ORDER TO VERIFY THE TRANSACTIONS, AO ISSUED NOTICES UNDER SECTION 133 (6) OF THE A CT AND COMMISSIONS UNDER SECTIO N 131 (D) ON THE ADDRESSES AVAILABLE ON THE RECORD AS FILED IN AUDIT REPORT FILED BY THE ASSESSEE. THESE NOTICES WERE ISSUED INDEPENDENTLY BY THE AO AND FOUND THAT SOME OF THE ADDRESSES GIVEN IN THE AUDIT REPORT ARE NOT CORRECT AND WHEN THE ASSESSEE WAS CO NFRONTED WITH THE ABOVE FACTS, ASSESSEE SUBMITTED THE PRESENT ADDRESS ES AND SOME DISCREPANCIES WERE ALSO NOTICED IN THE NAME OF THE COMPANIES , WHICH WERE CLARIFIED . THEN AO ISSUED FRESH NOTICES AND COMMISSIONS TO THOSE PARTIES. THE AO DISCUSSED THE ISSUES PARTYWISE AS BELOW: A) M/S SURAKSHA PROJECTS PRIVATE LIMITED: AO OBSERVED THAT AFTER ISSUE OF NOTICE AND COMMISSION, THE COMPANY SUO MOTO SUBMITTED THE DETAILS OF THE FINANCIALS OF THE COMPANY 4 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., IN THE DAK ON 26.12.2016. AO OBSERVED F ROM THE RETURN OF INCOME OF M/S. SURAKSHA PROJECTS THAT THE INCOME DECLARED BY THE COMPANY IS 3.5 LAKHS AND THE COMPANY HAS VERY LOW RETURNED INCOME. THE DIRECTORS OF THE COMPANY ARE CHIRANJIT MAHANTA AND RANJIT GUPTA. HE OBSERVED THAT THE ERSTWHILE DIRECTOR OF THE COMPANIES ARE SH RI UMESH SINGH, NEERAJ KEDIA AND PULAK BAGCHI AND THEY ARE DUMMY DIRECTOR UNDER THE ENTRY OPERATOR SHRI PRAVEEN AGARWAL. HE REFERRED TO THE STATEMENT ON THE OATH GIVEN BY SHRI PRAVEEN AGARWAL ON 10.02.2015 UNDER SECTION 133A. AO DISCUSSED THE VARIOUS ASPEC T OF CREATION OF SH E LL COMPANIES AND HOW IT IS CREATED AND RUN BY THE OPERATORS AND FINALLY CAME TO THE CONCLUSION THAT MERE FILING OF BALANCE SHEET AND PROFIT AND LOSS ACCOUNT CANNOT BE ACCEPTED AS PROOF OF CREDITWORTHINESS. HE CAME TO THE CONCLUSION WITH THE OBSERVATION THAT IT IS ACCEPTED PRACTICE THAT A/R OF THE SHE LL COMPANY WILL APPEAR BEFORE THE DEPARTMENT BUT DIRECTORS WILL NOT APPEAR SINCE THESE ARE NOT GENUINE DIRECTORS BUT BOGUS DIRECTOR S . ACCORDINGLY, HE MADE THE ADDITION UNDER SECTION 68 OF THE ACT. B) M/S VALLABH DIAMONDS PRIVATE LIMITED: THE AO CAME TO THE CONCLUSION THAT THERE ARE NO BUSINESS ACTIVITIES CARRIED OUT BY THIS COMPANY IN THE PREMISES FOR WHICH THE ADDRESS WAS GIVEN IN THE AUDIT REPORT, HE CAME TO THE ABOVE CONCLUSION BASED ON THE 5 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., R EPORT FROM INSPECTOR OF SURAT WING. HE OBSERVED THAT ASSESSEE HAS TAKE N UNSECURED LOANS OF 2. 5 CRORES FROM THIS COMPANY AND ASSESSEE HAS FILED CONFIRMATION AND BANK STATEMENT FOR THE PERIOD AY 2015 16 AND ASSESSEE ALSO FILED BALANCE SHEET AND OTHER FINANCIAL OF THE COMPANY ON 16.12.2016 FROM THE MCA WEBSITE. AO OBSERVED THAT ON GOING THROUGH THE BALANCE SHEET IT WAS FOUND THAT THE LIABILITY IS MAINLY ON ACCOUNT OF CR EDITORS OF 71 CRORES AND ASSE TS IS ON ACCOUNT OF DEBTORS OF 61 CRORES AND LOANS OF 8 CRORES. THE C OMPANY HAS DECLARED PROFIT OF 1.6 LAKHS . H E FURTHER OBSERVED THAT THE COMPAN Y IS INCORPORATED IN 20 13 AND CARRYING OUT MANUFACTURING AND OTHER COMMERCIAL ACTIVITIES , THIS COMPANY DOES NOT OWN ANY FIXED ASSETS IN THE B ALANCE SHEET AND ASSESSEE HAS NOT SUBMITTED ANY PROFIT AND LOSS STATEMENT. WITH THE ABOVE OBSERVATION HE DISALLOWED 2.50 CRORES UNDER SECTION 68 OF THE ACT. C) M/S POKHRANA IMPEX PRIVATE LIMITED: A SUMMON WAS ISSUED TO THE PARTY ON THE ADDRESS AS PER THE AUDIT REPORT ON 17.11.2016 CALLING FOR PERSONAL ATTENDANCE OF THE PARTY ON 21.11.2016. BUT NO ONE ATTENDED THE HEARING INSTE AD LETTER WAS FILED CONTAINING UNSIGNED LEDGER ACCOUNT, COPY OF INCOME TAX RETURNS AND BANK STATEMENTS REFLECTING THE PAYMENT. A SH OW CAUSE WAS ISSUED TO THE ASSESSEE TO PRODUCE THE PARTY AND ACCORDING TO THE AO THERE IS NO 6 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., CREDITWORTHINESS IN THE PARTY AS EVIDENT FROM THE ITR WHICH SHOW S NIL INCOME. HE OBSERVED THAT IN THE SHOW CAUSE NOTICE, IT IS SPECIFICALLY ASKED TO PRODUCE THE PARTY, THEREFORE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS TO PROVE IDENTITY , CREDITWORTHINESS AND GENUINENESS OF THE PARTY. THE AO OBSERVED THAT THE RETURN OF INCOME OF THE PARTY IS NIL AND THE IMMEDIATE SOURCE OF FUNDS ARE FROM M/S SUYANSH GEMS. ON FURTHER ANALYSIS OF THE BALANCE SHEET SHOWS THAT THERE ARE NO FIXED ASSETS IN THE BOOKS OF THE COMPANY THOUGH IT IS A MANUFACTURER, IMPORTER AND EXPORTER OF DIAMONDS . HE OBSERVED THAT THE COMPANY HAS SHOWN BOOK PROFIT OF 1.15 CRORES AND HAS NOT PAID ANY TAXES (MAT) AS PER ITR FILED BY THE ASSESSEE IN STEAD A REFUND WAS CLAIMED OF 9 LAKHS. SINCE THE ASSESSEE HAS NOT BROUGHT THE PA RTY ON RECORD AND THE IMMEDIATE SOUR CE OF FUNDS IS FROM SUYANSH GEMS, HE TREATED THE LOAN TAKEN BY THE ASSESSEE AS DISALLOWABLE UNDER SECTION 68 OF THE ACT. D) M/S APRATEEM GEMS PRIVATE LIMITED: A NOTICE WAS ISSUED ON THE ADDRESS MENTIONED IN AUDIT REPORT AND IT WAS FOUND THAT THE PARTY HAS ONLY DAK FOLDER THERE ARE NO BUSINESS IS CARRIED OUT AT THE PREMISES. A SHOW CAUSE NOTICE WAS ISSUE TO THE ASSESSEE AND ASKED TO PRODUCE THE PARTY TO VERIFY THE GENUINENESS AND CREDITWORTHINESS OF THE PARTY. IN RESPONSE ASSESSEE SUBMITTED THAT THERE 7 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., WAS A MISTAKE IN THE ADDRESS AND GAVE THE PROPER ADDRESS. THE APRATEEM GEMS WIDE LETTER DATED 12.12.2016 FILED THE DETAILS OF LOAN CONFIRMATION, BANK STATEMENT AND COPY OF ITR ACKNOWLEDGEMENT. AO OBSERVED THAT THERE ARE MULTIPLE ADDRESSES MENTIONED IN THE VARIOU S DOCUMENTS SUBMITTED BY THE PARTY AND HE CAME TO THE CONCLUSION THAT THE ONUS IS NOT PROVED ON THE CREDITWORTHINESS OF THE PARTY. ACCORDINGLY , HE TREATED THE LOAN TAKEN BY THE ASSESSEE AS DISALLOWABLE UNDER SECTION 68 OF THE ACT E) M/S INDIAN INFOTECH AND SOFTWARE LTD: A SHOW CAUSE NOTICE WAS ISSUE TO THE PARTY AND NONE APPEARED OR RESPONDED TO THE SHOW CAUSE NOTICE. WHEN ASSESSEE WAS SUMMONED SPECIFICALLY TO PRODUCE THE PARTY AND THE PARTY FAILED TO APPEAR THEREFORE, AO CAME TO THE CONCLUSION THAT ASSESSEE HAS NOT FULFILLED THE ONU S TO PROVE THE GENUINENESS. ACCORDINGLY, HE TREATED THE LOAN TAKEN BY THE ASSESSEE AS DISALLOWABLE UNDER SECTION 68 OF THE ACT. F) M/S DAFFODIL TRADERS PRIVATE LIMITED: A COMMISSION UNDER SECTION 131 (D) WAS SENT TO THE INVESTIGATION WING KOLKATA ON 17.11. 2016 TO VERIFY THE PARTY AND THE ADDRESS WAS AS PER THE AUDIT REPORT SUBMITTED BY THE ASSESSEE. THE INVESTIGATION WING FOUND THAT THE ADDRESS IS NOT CORRECT. WHEN THEY ISSUED SHOW CAUSE NOTICE 8 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., TO THE ASSESSEE AND ASSESSEE SUBMITTED THAT THE PARTY HAS MOVED TO NEW ADDRESS AND GAVE THE NEW ADDRESS. BASED ON THE REPORT FROM INVESTIGATION WING KOLKATA THAT THE PARTY HA S DECLARED RETURNED INCOME OF 8172/ AND THE TURNOVER IS 19 LAKHS. THE COMPANY HAS ONLY RESERVES AND SURPLUS ON THE LIABILITY SIDE AND ON THE ASSET SIDE ONLY INVESTMENT AND LOANS. IN REFERENCE TO SURVEY CONDUCTED IN THE CASE OF SOUMEN CHOUDHRY, IT WAS MENTIONED BY HIM IN THE STATEMENT THAT THIS COMPANY IS CONTROLLED BY HIM AND A BOGUS CONCERN. BASED ON THE ABOVE FACTS THE ASSESSEE WAS ASKED TO SUBSTANTIATE THE SAME AND WHY IT SHOULD NOT BE TREATED AS BOGUS. IN RESPONSE , ASSESSEE HAS SUBMITTED THE COMPANY PROFILE FROM MCA, AUDITED ACCOUNTS, BANK STATEMENT, LOAN CONFIRMATION ET CETERA. BASED ON THE ABOVE OBSERVATION OF THE INVESTIGATION WING , AO CAME TO THE CONCLUSION THAT IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE PARTY CANNOT BE PROVED AND HE DISALLOWED THE UNSECURED LOAN UNDER SECTION 68 OF THE ACT. G) M/S BABA BHOOTHNATH NIRMAN PRIVATE LIMITED: AO OBSERVED THAT THIS COMPANY HAS VERY LOW RETURNED INCOME. A COMMISSION UNDER SECTION 131(D) WAS ISSUED TO ADIT INVESTIGATION UNIT 5, KOLKATA TO EXAMINE THE PARTY. ADIT INVESTIGATION ISSUED SUMMONS AND IN RESPONSE THEY FILE D LEDGER COPY, ITR AND BALANCE S HEET. THE 9 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., INVESTIGATION WING OBSERVED TH AT THE FINANCIALS SHOWS THA T THERE IS INCREASE IN SHARE PREMIUM OF 6.2 CRORES IN FINANCIAL YEAR 2013 14 , THESE FUNDS HAVE COME FROM SURAKSHA PROJECTS, CAREFUL ENGINEERING PRIVATE LIMITED, HIGHRANK INFRASTRUCTURE PRIVATE LIMITED, KINGFISHER PROPERTIES PR IVATE LIMITED, LIMESTONE PROPERTIES PRIVATE L IMITED, SUNIYOJIT HIRISE LTD, SURAKSHIT REAL ESTATE PRIVATE LIMITED. THE ERSTWHILE DIRECTOR OF THESE COMPANIES SHRI UMESH SINGH, SHRI CHIRANJIT MAHANTA AND SHRI RANJIT GUPTA WERE A DUMMY DIRECTOR UNDER THE ENTRY OPERATOR SHRI PRAVEEN AGARWAL. SHRI PRAVEEN AGARWAL ADMITTED THAT THESE ARE SHE LL COMPANIES MAINTAINED BY HIM. BASED ON THE ABOVE REPORT FROM KOLKATTA INVESTIGATION WING, A SHOW CAUSE NOTICE WAS ISSUE D TO THE ASSESSEE ASKING WHY THE LOAN FROM THE PARTY SH OULD NOT BE TREATED AS BOGUS AND LOAN SHOULD NOT BE ADDED BACK AS ITS TOTAL INCOME. IN RESPONSE ASSESSEE SUBMITTED COMPANY PROFILE FROM MCA, AUDITED ACCOUNTS, BANK STATEMENTS, LOAN CONFIRMATION ET C., 5. AO BY RELYING ON THE CASE OF M/S BISAKHA SALES PRIVATE L IMITED VERSUS CIT KOLKATA, ITA NO. 1493/KOL/2013 IN WHICH IT WAS EXPLAINED THE M ODUS OPERANDI IN THE CASE OF SHE LL COMPANIES. HE OBSERVED THAT BABA BOOTHN A TH NIRMAN PRIVATE LIMITED IS A SHELL COMPANY. HE FURTHER OBSERVED THAT MERE FILING OF BALANCE SHEET A ND PROFIT AND LOSS ACCOUNT CANNOT BE ACCEPTED AS PROOF OF CREDITWORTHINESS. BY RELYING ON THE REPORT FROM THE 10 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., INVESTIGATION WING , HE CAME TO THE CONCL USION THAT THIS COMPANY IS A SHE LL COMPANY , ACCORDINGLY AO TREATED THE LOAN TAKEN FROM THIS COMPANY AS DIS ALLOWABLE UNDER SECTION 68 OF THE ACT. 6. BY RELYING ON THE DECISION OF HONBLE APEX COURT IN THE CASE OF CIT VERSUS DURGA PRASAD MORE (82 ITR 540) AND SUMATI DAYAL VERSUS CIT (214 ITR 801), AO OBSERVED THAT THE REVENUE AUTHORITIES ARE ALSO SUPPOSED TO CONSID ER THE SURROUNDING CIRCUMSTANCES AND APPLY THE TEST OF HUMAN PROBABILITIES. HE OBSERVED THAT LOAN TRANSACTIONS FROM PAPER COMPANIES THOUGH APPARENT BUT NOT TO BE REAL ONE. FURTHER HE OBSERVED THAT MERELY PRODUCING PAN, COMPUTERIZED CONFIRMATION OR ASSESSME NT PARTICULARS DO NOT ESTABLISH THE IDENTITY OF THE PERSON. THE ACTUAL AND TRUE IDENTITY OF THE PERSON OR A COMPANY IS THE BUSINESS UNDERTAKEN BY THEM. ACCORDING TO HIM IS THE CORRECT AND TRUE LEGAL POSITION. PAN NUMBERS ARE ALLOTTED ON THE BASIS OF APPLIC ATIONS WITHOUT ACTUAL DE FACTO VERIFICATION OF THE IDENTITY OR ASCERTAINING ACTIVE NATURE OF BUSINESS ACTIVITY. PAN IS A NUMBER, WHICH IS ALLOTTED AND HELD THE REVENUE TO KEEP TRACK OF THE FINANCIAL TRANSACTIONS. HE FURTHER OBSERVED THAT PAN NUMBER IS RELE VANT BUT CANNOT BE BLINDLY AND WITHOUT CONSIDERING SURROUNDING CIRCUMSTANCES TREATED AS SUFFICIENT TO DISCHARGE THE ONUS, EVEN WHEN PAYMENT IS THROUGH BANK ACCOUNT. 11 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., 7. ON THE QUESTION OF CREDITWORTHINESS AND GENUINENESS, AO OBSERVED THAT MONEY NO DOUBT IS REC EIVED THROUGH BANKING CHANNELS BUT DID NOT REFLECT ACTUAL BUSINESS ACTIVITY. THE LOAN PROVIDERS DID NOT HAVE THEIR OWN PROFIT MAKING APPARATUS AND ARE NOT INVOLVED IN ANY BUSINESS ACTIVITY. THEY MERELY ROTATE MONEY WHICH IS COMING THROUGH THE LAYERS OF BAN K ACCOUNTS AND THEREFORE DO NOT REFLECT THE CREDITWORTHINESS OR EVEN GENUINENESS OF THE TRANSACTION. FURTHER HE REJECTED THE CONTENTION OF THE ASSESSEE THAT THE COMPANIES WHICH PROVIDED UNSECURED LOANS TO THE ASSESSEE ARE BO R NE ON THE FILE OF ROC AND HE OP INED THAT EVERY COMPANY INCORPORATED UNDER THE COMPANIES ACT 1956 HAS TO COMPLY THE STATUTORY FORMALITIES AND THESE COMPANIES ARE COMPLYING WITH SUCH FORMALITIES DOES NOT ADD ANY CREDIBILITY OR EVIDENTIARY VALUE. 8. CONSIDERING THE ABOVE DISCUSSION, AO TREATED THE ABOVE TRANSACTIONS AS NOT GENUINE , THE INTE REST EXPENDITURE OF 13,85,475/ AS DETAILED BELOW CLAIM ED TO HAVE PAID TO THE ENTITIES WAS TREATED AS SHAM TRANSACTIONS. ACCORDINGLY , AO DISALLOWED THE INTEREST EXPENDITURE CLAIMED BY THE ASSESSEE. SR.NO. NAME OF THE LOAN PARTY AMOUNT (RS.) 1 SURAKHSHA PROJECTS LTD. 93,924/ - 2 VALABH DIAMONDS PVT. LTD. 7,50,257/ - 3 POKHRANA IMPEX PVT. LTD. 66,452/ - 4 APRATEEM GEMS PVT. LTD. 57,144/ - 5 INDIAN INFOTECH AND SOFTWARE LD. 2,63,342/ - 6 DAFFODIL TRADERS PVT. LTD. 50,959/ - 12 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., SR.NO. NAME OF THE LOAN PARTY AMOUNT (RS.) 7 BABA BHOOTHNATH NIRMAN PVT. LTD. 1,03,397/ - TOTAL 13,85,475/ - 9. AGGRIEVED WITH THE ABOVE ORDER, ASSESSEE PREFERRED AN APPEAL BEFORE CIT(A) 17 AND SUBMITTED A DETAILED SUBMISSION BEFORE HIM, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, LD CIT(A) REJECTED THE CONTENTIONS OF THE ASSESSEE AND SUSTAINED THE ADDITION WITH THE FOLLOWING OBSERVATIONS: 4.2.2 THE APPELLANT COMPANY IS A PRIVATE LIMITED COMPANY. THE COMPANIES WHICH HAVE ADVANCED LOANS ARE NOTHING BUT SHELL COMPANIES. SUBSEQUENTLY, THE COMPANIES HAVE ALSO NOT BOTHERED TO ENSURED THEIR INVESTMENT AS NO SUCH DETAILS HAVE BEEN BROUGHT. MERELY SUBMISSION OF PAN AND INCOME - TAX DETAILS OF THE LENDER COMPANIES DID NOT RENDER THE TRANSACTION AS GENUINE, DOES NOT ESTABLISH THE IDENTITY OF PERSONS. IDENTIFICATION OF PERSON INCLUDES THE PLACE OF WORK, STAFF AND THE FAC T THAT IT WAS ACTUALLY CARRYING ON A BUSINESS AND FURTHER RECOGNITION OF THE SAID COMPANY IN THE EYES OF PUBLIC. ALL THE BANK ACCOUNTS OF THE LENDER COMPANY HAVE COMMON PATTERN WHERE INVESTMENT FROM THOSE BANK ACCOUNTS IN THE FORM OF LOANS IS NOT OUT OF AC CUMULATED RESERVES BUT EQUIVALENT AMOUNTS HAVE BEEN DEPOSITED ON THE SAME DAY. 4.2.3 THUS, FROM THE FACTS ANALYSED, DECISIONS / JUDGMENTS AS ENUMERATED ABOVE OF VARIOUS HON'BLE HIGH COURTS, HON'BLE SUPREME COURTS, ALL THE THREE INGREDIENTS OF SECTION 68 RE MAINS UN - ESTABLISHED AND THE A.O. HAS RIGHTLY ASSESSED THE UNSECURED LOAN OF RS.6,00,00,000/ - RECEIVED FROM SHELL COMPANIES AS CASH CREDIT U/S 68 OF THE ACT. AS THE UNSECURED LOAN HAS BEEN HELD TO BE BOGUS AND NON - GENUINE, THEREFORE, THE INTEREST EXPENDITUR E OF RS.13,85,475/ - HAS ALSO BEEN RIGHTLY DISALLOWED BY THE A.O. THE ADDITIONS MADE BY THE A.O. IS THEREFORE, UPHELD AND THE GROUNDS OF APPEAL ON THIS ISSUE ARE DISMISSED , 10. AGGRIEVED WITH THE ABOVE ORDER ASSESSEE IS IN APPEAL BEFORE US R A ISING FOLLOWING GR OUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE COMMISSIONER OF INCOME - TAX (APPEALS) - 17 MUMBAI HAS ERRED IN PASSING THE APPEAL ORDER WITHOUT CONSIDERING ALL THE DOCUMENTS 13 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., SUBMITTED BY THE APPELLANT TO PROVE IDENTITY, C REDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. 2 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE COMMISS IONER OF INCOME - TAX (APPEALS) - 17 MUMBAI HAS ERRED IN REJECTING ALL THE SUPPORTING DOCUMENTS SUBMITTED BY THE APPELLANT AND TREATED ALL THE UNSECURED OF RS.6,00,00,000/ - AS A UNEXPLAINED CASH CREDIT UNDER SECTION 68 AND INTEREST PAYMENT OF RS.13,85,475/ - AS A UNEXPLAINED EXPENDITURE UNDER SECTION 69C. 3. APPELLANT PRAY THAT PRAY: - THAT ASSESSING OFFICER MAY BE DIRECTED TO DELETE TOTAL UNEXPLAINED CASH CREDIT ADDITION AND ALSO INTEREST PAID AND PROVIDED ON SUCH LOAN. THE APPELLANT CRAVES LEAVE TO AMEND, ALTER OR DELETE ANY OF THE ABOVE GROU NDS OF APPEAL. 11. BEFORE U S, LD AR SUBMITTED A DETAILED WRITTEN SUBMISSION AND FOR THE SAKE OF CLARITY IT IS REPRODUCED BELOW: DURING THE RELEVANT ASSESSMENT YEAR, THE APPELLANT COMPANY HAS TAKEN LOANS FROM THE FOLLOWING PARTIES: SR. NO. NAME OF PARTY AMOUNT(RS.) 1. APRATEEM GEMS PVT. LTD. 25,00,000 2. BABA BHOOTHNATH NIRMAN PVT. LTD. 97,00,000 3. DAFFODIL TRADERS PVT. LTD. 50,00,000 4. INDIAN INFOTECH AND SOFTWARE PVT. LTD. 1,00,00,000 5. POKHRANA IMPEX PVT. LTD. 25,00,000 6. SURAKHSHA PROJECTS PVT. LTD. 53,00,000 7. VALLABH DIAMONDS PVT. LTD. 2,50,00,000 TOTAL 6, 00,00,000 11. AT THE OUTSET IT IS SUBMITTED THAT, LEARNED ASSESSING OFFICER HAS IGNORED FOLLOWING VITAL FACTS OUTLINED AS UNDER: A. THE APPLICANT HAD RECEIVED SHORT TERM LOANS DURING THE F.Y 2014 - 15 FOR RUNNING ITS BUSINESS ACTIVITIES. INTEREST WAS PAID TO THE LENDER FOR THE TIME INTERVAL BETWEEN RECEIPT AND RE - PAYMENT OF LOAN. 12. INTEREST WAS PAID BY THE ASSESSEE TO THE SAID LENDE RS AND TDS WAS DULY DEDUCTED. IT WAS ALLEGED THAT MR. PRAVLN KUMAR AGARWAL HAS ADMITTED BEFORE THE I T AUTHORITIES THAT HE HAD BEEN INDULGED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES IN THE FORM OF CAPITAL GAIN, LOANS, SALE AND PURCHASES ETC IN CA SE OF DAFFODIL TRADERS PVT. LTD., AND SURAKHA PRODUCTS PVT. LTD., AND IN OTHER 5 14 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., COMPANIES HE IS NO WHERE RELATED AND THERE IS NO INFORMATION FROM INVESTIGATION DEPARTMENT. A. THE APPELLANT COMPANY'S BOOKS OF ACCOUNTS ARE AUDITED AND WERE SUBMITTED TO THE LEARNED ASSESSING OFFICER AND THERE WERE NO ADVERSE REMARKS OF THE AUDITORS IN THE SAID REPORT. THEREFORE, THE TRANSACTION ENTERED INTO BY THE ASSESSEE COMPANY CANNOT BE DOUBTED. 13. T HE LEARNED ASSESSING OFFICER HAD HEAVILY RELIED ON THE STATEMENT OF MR. PRAVEEN KUMAR AGARWAL. THESE STATEMENTS WERE RECORDED AT THE BACK OF THE APPELLANT. 14. THE APPELLANT HAD RECEIVED LOAN FROM THE SAID LENDER COMPANIES WHICH ARE DULY REGISTERED UNDER THE PROVISION OF COMPANIES ACT AND THE LENDER COMPANIES ARE FILING RETUR N OF INCOME REGULARLY. 15. THE APPELLANT HAD RECEIVED UNSECURED LOAN DURING THE SAID ASSESSMENT YEAR AND HAD REPAID THE TOTAL DUES, FURTHER THE ENTIRE TRANSACTIONS OF RECEIPTS AND PAYMENTS WERE MADE BY ACCOUNT PAYEE CHEQUES. 16. THE APPELLANT HAD ALSO FILE D CONFIRMATION OF THE SAID LENDER COMPANIES AND SUBMITTED THE COPY OF ACKNOWLEDGMENT OF INCOME TAX RETURN OF THE LENDER COMPANIES, WHERE THE SAID LENDERS HAD OFFERED INCOME BY WAY OF INTEREST PAID BY THE APPELLANT TO THE LENDERS WITH TDS CLAIM. IT IS CLEAR THAT THE SAID LENDERS HAD SHOWN INTEREST INCOME RECEIVED IN ITS ENTIRETY AND IT IS NOT WRONG TO ASSUME THAT THE DEPARTMENT HAS ALREADY ACCEPTED SUCH INCOME IN THE HANDS OF THE SAID LENDERS AS TOTAL INTEREST RECEIVED BY THE LENDERS AND HAS NOT ASSESSED INC OME BY WAY OF SO CALLED ENTRY COMMISSION AS HAS BEEN ALLEGED. THUS ON ONE HAND WHEN IT COMES TO CHARGE OF INCOME THE AMOUNT IS ASSESSED AS TOTAL INCOME TREATING THE INCOME AS GENUINE WHEREAS WHEN IT COMES TO ALLOWANCE OF SAME EXPENDITURE THE SAME IS TREATE D AS BEEN DISALLOWED TREATING IT AS NON - GENUINE. 17. THE LEARNED ASSESSING OFFICER HAS FAILED TO APPRECIATE THE FACTS THAT APPELLANT HAD OBTAINED ONLY TEMPORARY LOAN WHICH HAS BEEN REPAID. THUS WHAT IS REQUIRED TO BE SEEN IS AS TO WHETHER THE SAID LENDERS HAD SUFFICIENT FUNDS TO ADVANCE APPELLANT. IF FOR THE SAKE OF ARGUMENT IT IS UNDERSTOOD THAT THE SAID LENDER COMPANIES WERE COMPANIES OF MR. PRAVEEN KUMAR AGARWAL AND THEN IN THAT CASE WHETHER THE SAID MR. PRAVEEN KUMAR AGARWAL WAS CAPABLE OF ADVANCING SUC H AMOUNT EVEN WITHOUT RECEIVING CASH IS A VITAL QUESTION WHICH SHOULD BE ASKED AND VERIFIED. ON APPRECIATION OF THE FACT AND AS PER STATEMENT OF VARIOUS PERSONS RECORDED IT IS QUITE CLEAR THAT EVEN WITHOUT RECEIVING CASH BEFOREHAND THE SAID LENDER COMPANI ES WERE CAPABLE OF ADVANCING SUCH AMOUNT. 18. SECTION 68 OF THE ACT READS AS UNDER: - 15 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF O R THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF ASSESSING OFFICER, SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME - TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR :' IT IS SETTLED POSITION THAT TO PROVE THE GENUINENESS OF THE TRANSACTION, THE B URDEN LIES ON THE ASSESSEE AND TO DISCHAR GE THE ONUS, THE ASSESSEE MUST P ROVE THE FOLLOWING - I. IDENTITY OF THE CREDITOR II. CAPACITY OF THE CREDITOR III. GENUINENESS OF THE TRANSA CTION ONCE THE ABOVE CONDITIONS ARE PROVED PRIMA FACIE BY THE ASSESSEE AND THE A SSESSEE HAS ADDUCED EVIDENCE TO ESTABLISH PRIMA FACIE THE AFORESAID, THE ONUS SHIFTS ON THE DEPARTMENT. THREE CONDITIONS ENSHRINED IN SECTION 68 ARE CLEARLY PROVED BY THE DOCUMENTS SUBMITTED DURING THE AS SESSMENT PROCEEDINGS AS UNDER I TO PROVE THE IDENTITY A) NAME, ADDRESS, PAN, INCOME - TAX JURISDICTION, ETC. OF THE LENDER COMPANIES; B) COPY OF AUDIT REPORT AND BALANCE SHEET OF THE LENDER COMPANIES. THE COMPANY'S INCOME - TAX JURISDICTION DETAILS AND FINANCIALS OF THE LENDER'S COMPANIES PROVED THE IDENTITY AS WELL AS FINANCIAL CAPACITY I.E. CREDITWORTHINESS OF THE LENDER'S COMPANIES. HENCE, THE AFORESAID DOCUMENTS HAS PROVED THE IDENTITY OF THE LENDERS. II. TO PROVE THE CR EDITWORTHINESS THE APPELLANT HAS SUBMITTED THE BALANCE SHEET, PROFIT & LOSS A/C AND RETURN OF INCOME FOR LENDERS. THE FINANCIALS OF THE LENDERS COMPANIES PROVED THE IDENTITY AS WELL AS FINANCIAL CAPACITY I.E. CREDITWORTHINESS OF THE LENDER'S COMPANIES. A) COPY OF AUDITED BALANCE SHEET OF THE LENDER COMPANY B) RELEVANT BANK STATEMENT C) COPY OF LEDGER ACCOUNT 16 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., 1. FURTHER, THE APPELLANT SUBMIT THAT THE COMPANY'S INCOME - TAX JURISDICTION DETAILS AND FINANCIALS OF THE LENDER'S COMPANIES PROVED THE IDENTITY AS WELL AS FINANCIAL CAPACITY I.E. CREDITWORTHINESS OF THE LENDERR'S COMPANIES. 2. THE CI T(A) TREATED UNSECURED LOAN AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT ON THE ALLEGED GROUND THAT THE APPELLANT HAS NOT BROUGHT ON RECORD TO PROVE THE IDENTITY, GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINESS OF THE INVESTORS WITHOUT APPRECIATING THAT THE APPELLANT HAS SUBMITTED THE COPIES OF DIRECTOR REPORT, BALANCE SHEET , BANK STATEMENTS ETC., CLEARLY BROUGHT OUT THE NATURE OF THE TRANSACTIONS, AMOUNT INVOLVED AND SCOPE OF THE TRANSACTION. 3 . THE APPELLANT SUBMIT THAT THE APPELLANT HAS DISCHARGED ITS ONUS OF PROVING THE IDENTITY OF THE PARTIES, GENUINENESS OF THE TRANSAC TIONS AND THE CREDITWORTHINESS OF THE LENDER. THEREFORE, THE APPELLANT HUMBLY SUBMIT THAT THE ADDITION MADE UNDER SECTION 68 OF THE ACT BE DELETED. III. TO PROVE THE GENUINENESS THE APPELLANT HAS SUBMITTED THE EXTRACT OF BANK STATEMENT OF ALL ABOVE MENTIONED LENDERS, DULY HIGHLIGHTING THE ENTRIES OF LOAN GIVEN BY THEM TO THE APPELLANT COMPANY. A) TRANSACTION THROUGH ACCOUNT PAYEE CHEQUES. B) BANK STATEMENT OF THE APPELLANT AND LENDER COMPANIES C) LOAN CONFIRMATION YOUR HONOR CAN REFER THE PAGE NOS. 31 - 240 OF THE PAPER BOOK; THE DETAILS IN LENGTH WERE SUBMITTED. EACH AND EVERY LENDER HAS CONFIRMED THE TRANSACTION WITH THE APPELLANT COMPANY. THEREFORE, THE FINDINGS GIVEN BY THE LD. CIT(A) WERE IN CONTRADICTION OF SECTION 68 OF THE A CT. ON PERUSAL OF THE FINANCIAL STATEMENTS FILED BY THE APPELLANT TO ASSESSING OFFICER YOUR HONOUR WILL NOTE THAT ALL SEVEN COMPANIES ARE ACTIVE IN THE WEBSITE OF MINISTRY OF CORPORATE AFFAIRS. A COPY 'ENCLOSED HEREWITH. THIS FACT HAS BEEN FURTHER SUPPORTE D BY THE LETTER OF AO WHEREIN THE AO HAS ACCEPTED THAT THESE COMPANIES ARE ACTIVE ON MCA WEBSITE. BY SUBMITTING THE ABOVE DETAILS, THE APPELLANT HAS DISCHARGED HIS PRIMARY ONUS OF PROVING THE UNSECURED LOAN AS GENUINE TRANSACTION. HOWEVER, THE LD. ASSESSIN G OFFICER WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE ERRED IN MAKING ADDITION OF RS. 6,00,00,000/ - BEING THE AMOUNT RECEIVED TOWARDS LOAN U/S. 68 AS UNEXPLAINED CASH CREDIT WITHOUT HAVING ANY JURISDICTION. 17 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., THUS ALL THE INGREDIENTS OF S.68 OF THE ACT WERE FULLY PROVED AND ESTABLISHED BEFORE THE LD. CIT(A). FURTHER, WE HEREBY PROVIDE DETAILS ABOUT EACH PARTY WHOSE LOAN AMOUNT IS ADDED TO THE RETURN INCOME. 1. IN CASE OF SURAKSHA PROJECTS LIMITED. THE LEARNED ASSESSING OFFICER HAS SENT SUMMON WRONGLY TO SURAKHA PRODUCTS PVT LTD, INSTEAD OF SURAKSHA PROJECTS LIMITED, WHERE THAT PARTY HAS REPLIED THAT THERE IS NO TRANSACTION WITH THIS COMPANY WHICH WAS LATER ON INFORMED TO APPELLANT WHO IN TURN GIVEN PROPER NEW ADDRESS WHE RE SUMMONS U/S 133 (6) WAS ISSUED AND A COMMISSION WAS ALSO SENT. THE LEARNED OFFICER HAS GIVEN COPY OF SUMMON TO APPEALLANT WHO IN TURN ASKED C REDITOR LOAN COMPANY TO PROVIDE ALL THE REQUIRED DETAILS. THE COMPANY SURAKSHA PROJECT LIMITED HAS SUBMITTED A LL THE DETAILS ON 26 TH DECEMBER 2016 WHICH WERE REQUIRED. THESE DETAILS HAVE BEEN RECEIVED BY HIM AS ACKNOWLEDGED BY ASSESSING OFFICER IN THE ASSESSMENT ORDER BUT NOT ACCEPTED THE REPLY BY NARRATING UNRELATED STORY IN THE ASSESSMENT ORDER AND ADDED .53,00,000/ - AND INTEREST O F .93,924/ - . HE HAS MENTIONED IRRELEVANT MODES OPERANDI OF SHELL COMPANY HOW IT WORK AND ALSO STATEMENT GIVEN BY ONE MR. PRAVIN KUMAR AGARWAL IN COURSE OF HIS SEARCH. NOWHERE IN SEARCH HAD PROCEEDING AND OTHER DOCUMENT ANNEXED BY ASSESSING OFFICER TO THI S RELATED ASSESSMENT ORDER MENTIONED THAT THE APPELLANT HAS DONE ANY BOGUS TRANSACTION AND THERE WAS CASH INVOLVEMENT IN THE TRANSACTION. FINANCIAL DETAILS ARE AS UNDER: - TURNOVER (RS.) 14,73,44,805 CAPITAL (RS.) 33,00,000 RESERVES (RS.) 13,73,50,459 LOAN TO NISA (RS.) 53,00,000 THERE IS NO PROOF AT ALL AGAINST THE APPELLANT THAT THESE LOANS ARE CONCEALMENT OF THE INCOME THAN SUCH LOAN & INTEREST AMOUNT CANNOT BE ADDED. THIS LOAN HAS BEEN ALREADY REPAID IN FINANCIAL YEAR 2019 - 20. 2. IN CASE OF VALLABH DIAMONDS PVT. LTD, A COMMISSION U/S 131 (D) WAS SENT TO ADIT SURAT WHO HAS REACH TO THE OFFICE OF PARTY BUT THAT DAY IT WAS CLOSED. THE INSPECTOR HAS AFFIXED THE SUMMON ON THE PREMISES AND IN TURNED PARTY HAS SUBMITTED ALL THE DETAILS ON 16 TH DECEMBER, 2016. FURTHER VALLABH DIAMONDS PVT. LTD. ITS SELF HAS FILED ALL THE REQUIRED DETAILS ON 14 TH DECEMBER, 2016. THIS COMPANY IS HAVING BUSINESS TURNOVER OF MORE THAN 100 CRORES. THE LEARNED ASSESSING OFFICER HAS WRITTEN THAT HE HAS CARRIED OUT THRO UGH ENQUIRY WHICH IS TOTALLY WRONG. THE LEARNED ASSESSING OFFICER NEVER ASKED AR OF APPELLANT TO SUBMIT ANY MISSING DETAILS. THIS APPELLANT HAS REPAID TOTAL LOAN TO THIS PARTY. THE COMPANY HAS PROVIDE ALL THE REQUIRED DETAILS WHICH HAS BEEN RECEIVED BY HIM AS ACKNOWLEDGED BY ASSESSING OFFICER IN THE ASSESSMENT ORDER BUT NOT ACCEPTED THE 18 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., REPLY BY NARRATING UNRELATED STORY IN THE ASSESSMENT ORDER AND ADDED RS.2,50,00,000/ - INTEREST OF RS.7,50,257/ - . FINANCIAL DETAILS ARE AS UNDER : - TURNOVER (RS.) 205,14,72 ,103 CAPITAL (RS.) 1,00,000 RESERVES (RS.) 1,65,630 LOAN TO NISA (RS.) 2,50,00,000 THERE IS NO PROOF AT ALL AGAINST THE APPELLANT THAT THESE LOANS ARE CONCEALMENT OF THE INCOME THAN SUCH LOAN & INTEREST AMOUNT CANNOT BE ADDED. THIS LOAN HAS BEEN ALREADY REPAID IN FINANCIAL YEAR 2014 - 15 AND 2015 - 16. 3. IN CASE OF POKHARNA IMPEX PVT, LTD. IN THIS CASE A NOTICE WAS ISSUED TO VERIFY GENUINENESS OF UNSECURED LOAN OF RS.25,00, 000/ - TO PARTY WHICH IN TURN SUBMITTED DETAILS SUCH AS LEDGER ACCOUNT, CONFIRMATION, INCOME TAX RETURN, BANK STATEMENT, AUDITED BALANCE SHEET ON 21 ST NOVEMBER 2016, BUT WITHOUT GIVEN ANY PROPER REASON HE HAS ADDED RS. 25,00,000/ - AND INTEREST OF RS.66,452/ - TO TAXABLE INCOME. FINANCIAL DETAILS ARE AS UNDER: - TURNOVER (RS.) 91,27,56,605 CAPITAL (RS.) 1,00,000 RESERVES (RS.) - 60,57,995 TRADE PAYABLE (RS.) 40,97,21,641 LOAN TO NISA (RS.) 2,50,00,000 THERE IS NO PROOF AT ALL AGAINST THE APPELLANT THAT THESE LOANS ARE CONCEALMENT OF THE INCOME THAN SUCH LOAN & INTEREST AMOUNT CANNOT BE ADDED. THIS LOAN HAS BEEN ALREADY REPAID IN FINANCIAL YEAR 2017 - 18 . 4. IN CASE OF APRATEEM GEMS PVT.LTD: - IN THIS CASE ALSO APRATEEM GEMS PVT. LTD. HAS SUBMITTED LOAN CONFIRMATION, LEDGER ACCOUNT, INCOME TAX RETURN, BANK STATEMENT, AUDITED BALANCE SHEET ON 12 TH DECEMBER, 2016 IN RESPONSE TO NOTICE DATED 4 TH DECEMBER, 2016 THE LEARNED ASSESSING OFFICER REJECTED ALL THE PROOF WITHOUT GIVING ANY PROPER REASONS AND ADDED RS.25,00,000/ - BEING UNSECURED LOAN AN D RS.57,144/ - INTEREST PAYMENT. FINANCIAL DETAILS ARE AS UNDER : - TURNOVER (RS.) 83,66,93,733 CAPITAL (RS.) 1,00,000 RESERVES (RS.) 1,66,91,028 TRADE PAYABLE (RS.) 45,06,58,875 LOAN TO NISA (RS.) 25,00,000 19 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., THERE IS NO PROOF AT ALL AGAINST THE APPELLANT THAT THESE LOANS ARE CONCEALMENT OF THE INCOME THAN SUCH LOAN & INTEREST AMOUNT CANNOT BE ADDED. THIS LOAN HAS BEEN ALREADY REPAID IN FINANCIAL YEAR 2018 - 19. 5. IN CASE OF INDIAN INFOTECH & SOFTWARE LTD : - IN THIS CASE ALSO PARTY HAS SUBMITTED LOAN CONFIRMATION, LEDGER ACCOUNT, INCOME TAX RETURN, BANK STATEMENT, AUDITED BALANCE SHEET ON 21 ST DECEMBER,2016 IN RESPONSE TO NOTICE DATED 4 TH DECEMBEER, 2016 THE LEARNED ASSESSING OFFICER REJECTED ALL THE PROOF WITHOUT GIVING ANY PROPER REASONS AND ADDED RS.1,00,00,000/ - BEING UNSECURED LOAN AND RS.2,63,342/ - INTEREST PAYMENT. FINANCIAL DETAILS ARE AS UNDER : - TURNOVER (RS.) 14,40,12,476 CAPITAL (RS.) 1,00,34,41,010 RESERVES (RS.) 1,46,03,75,393 LOAN TO NISA (RS.) 1,00,00,000 THERE IS NO PROOF AT ALL AGAINST THE APPELLANT THAT THESE LOANS ARE CONCEALMENT OF THE INCOME THAN SUCH LOAN & INTEREST AMOUNT CANNOT BE ADDED. THIS LOAN HAS BEEN ALREADY REPAID IN FINANCIAL YEAR 2017 - 18. 6. IN CASE OF DAFFODIL TRADERS PVT, LTD,: - A COMMISSION U/S 131 (D) WAS SENT TO ADIT CALCUTTA BUT THERE WAS CHANGE OF ADDRESS WHICH HAS BEEN INFORMED TO ASSESSING OFFICER BY THE APPELLANT. THE AR OF THE APPELLANT HAS SUBMITTED ALL THE REQUIRED DOCUMENTS SUCH AS COMPANY PROFILE FROM MCA, AUDITED ACCOUNTS, BANK STATEMENT, TO PRO VE IDENTITY & CREDITWORTHINESS OF THE PARTY AND GENUINENESS OF THE TRANSACTION THAN ALSO LEARNED ASSESSING OFFICER GIVING REFERENCE OF GET WAY FINANCIAL SERVICES PRV.LTD. WITHOUT ANY BASIS HAS ADDED .50,00,000/ - OF UNSECURED LOAN AND .50,959/ - INTEREST ON THESE LOAN TO INCOME. FINANCIAL DETAILS ARE AS UNDER: - TURNOVER (RS.) 19,09,222 CAPITAL (RS.) 9,98,000 RESERVES (RS.) 44,80,79,901 LOAN TO NISA (RS.) 50,00,000 THERE IS NO PROOF AT ALL AGAINST THE APPELLANT THAT THESE LOANS ARE CONCEALMENT OF THE INCOME THAN SUCH LOAN & INTEREST AMOUNT CANNOT BE ADDED . 7. IN CASE OF BABA BHOOTHNATH NIRMAN PVT.LTD. : - A COMMISSION U/S 131 (D) WAS SENT TO ADIT CALCUTTA WHO TURN REPORTED THAT ON BEHALF OF COMPANY ONE MR.AAYUSH GOYAL HAS APPEARED BEFORE THEM AND SUBMITTED LEDGER ACCOUNT, ITR ACKNOWLEDGEMENT, 20 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., BANK STATEMENT, AND AUDITED BALANCE SHEET TO PROVE THE TRANSACTIO N. THIS LOAN HAS BEEN REPAID IN THE NEXT FINANCIAL YEAR BY THE APPELLANT. THE AR OF THE APPELLANT HAS ALSO SUBMITTED VIDE LETTER DATED 30 TH DECEMBER, 2016 ALL THE REQUIRED DOCUMENTS SUCH AS COMPANY PROFILE FROM MCA, AUDITED ACCOUNTS, BANK STATEMENT, TO PRO VE IDENTITY & CREDITWORTHINESS OF THE PARTY AND GENUINENESS OF THE TRANSACTION THAN ALSO LEARNED ASSESSING OFFICER GIVING REFERENCE OF GETWAY FINANCIAL SERVICES PVT. LTD. WITHOUT ANY BASIS HAS ADDED RS.97,00,000/ - OF UNSECURED LOAN AND RS. 1,03,397/ - INTER EST ON THESE LOAN TO INCOME. FINANCIAL DETAILS ARE AS UNDER : - TURNOVER (RS.) 1,52,38,817 ; CAPITAL (RS.) 41,50,000 RESERVES (RS.) 7,31, 10,510 LOAN TO NISA (RS.) 97,00,000 THERE IS NO PROOF AT ALL AGAINST THE APPELLANT THAT THESE LOANS ARE CONCEALMENT OF THE INCOME THAN SUCH LOAN & INTEREST AMOUNT CANNOT BE ADDED. THIS LOAN HAS BEEN ALREADY REPAID IN FINANCIAL YEAR 2017 - 18. OUT OF THE ABOVE SEVEN PARTIES LEARNED ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS HE HAS RECEIVED INFORMATION FROM CALCUTTA DD I STATEMENT OF ONE PRAVIN KUMAR AGARWAL AND OTHERS WHO ARE DIRECTLY OR INDIRECTLY INVOLVED IN AFFAIRS OF ONE DAFOFODIL TRADERS PVT.LTD. AND ANOTHER SURAKHA PRODUCTS PVT LTD. BASED ON THE INFORMATION RECEIVED FROM INVESTIGATION WING, THE AO OPINED THAT THOU GH THE ASSESSEE HAS FURNISHED VARIOUS DETAILS TO PROVE IDENTITY, THE LOAN TRANSACTIONS ARE NOT GENUINE AND ACCORDINGLY MADE ADDITION U/S 68 OF THE INCOME TAX ACT, 1961. BESIDES, THE AO ALSO DISALLOWED INTEREST PAID AGAINST THE SAID BOGUS LOANS. OTHER COMPA NIES SUCH AS APRATEEM GEMS PVT LTD. POKHARANA IMPEX PVT. LTD. AND VALLABH DIAMONDS PVT LTD., HE IS NO WHERE RELATED AND THERE IS NO INFORMATION OTHER INVESTIGATION DEPARTMENT THAN THERE SHOULD NOT BE ANY ADDITION OF SUCH LOAN AND INTEREST TO RETURNED INCOM E. THE ASSESSEE FURTHER SUBMITTED THAT IN RESPONSE TO NOTICE ISSUED U/S. 133(6), OTHER PARTIES FILED THEIR REPLIES ALONG WITH REQUIRED DOCUMENTS BEFORE THE ASSESSING OFFICER, THEREFORE, THE ASSESSING OFFICER WAS TOTALLY INCORRECT IN COMING TO THE CONCLUSI ON THAT THE LOAN TRANSACTIONS ARE BOGUS ACCOMMODATION ENTRIES ONLY ON THE BASIS OF INFORMATION RECEIVED FROM INVESTIGATION WING REGARDING ABOUT TWO COMPANIES ONLY. THE LD. CIT(A) OPINED THAT UNSECURED LOANS STATED TO BE RECEIVED FROM THOSE COMPANIES ARE UN EXPLAINED CREDIT AND HENCE MADE ADDITION U/S 68 OF THE SAME UNDER THE ACT WITHOUT CONSIDERING THAT THEY ARE SUPPORTED BY VALID DOCUMENTS. THE ASSESSEE FURTHER SUBMITTED THAT IT HAS FURNISHED CONFIRMATION LETTERS ALONG WITH COPIES OF THEIR BANK STATEMENT AN D ACKNOWLEDGEMENT OF IT RETURNS SHOWING THE ABOVE TRANSACTIONS. THE ASSESSEE FURTHER CONTENDED THAT IN 21 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., RESPONSE TO NOTICES U/S 133(6) ISSUED BY AO, THE ABOVE PARTIES REPLIED ALONG WITH DOCUMENTS MENTIONED IN THE NOTICE, THEREFORE, THERE IS NO REASON FOR TH E AO TO DOUBT THE TRANSACTIONS ONLY ON THE BASIS OF INFORMATION RECEIVED FROM INVESTIGATION WING THAT TOO, WITHOUT PROVIDING ANY OPPORTUNITY OF CROSS EXAMINATION OF THE PARTIES. IN THIS REGARD, WE RELIED UPON JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE O F LOVELY EXPORTS PVT LTD VS CIT 216 CTR 295(SC). THE AO HAS BROUGHT OUT FACTS IN THE LIGHT OF STATEMENT OF SHRI PRAVINKUMAR AGARWAL & OTHERS DEPOSED BEFORE THE INVESTIGATION WING TO MAKE ADDITION 85 THAT IS ALSO YOU MAY RELATED TO TWO COMPANIES. EXCEPT THIS, THERE IS NO CONTRARY EVIDENCE IN THE POSSESSION OF THE AO TO DISPROVE THE LOAN TRANSACTIONS FROM THESE SEVEN PARTIES ON THE OTHER HAND, THE ASSESSEE HAS FURNISHED VARIOUS DETAILS INCLUDING CONFIRMATION LETTERS FROM THE PARTI ES, THEIR BANK STATEMENTS ALONG WITH THEIR FINANCIAL STATEMENTS TO PROVE IDENTITY, GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE PARTIES. THE ASSESSEE ALSO FURNISHED EVIDENCES TO PROVE THAT THE PARTIES HAVE RESPONDED TO THE NOTICES ISSUED U/S 133 (6) BY AO BY FILING VARIOUS DETAILS. THE ASSESSEE ALSO FILED BANK STATEMENTS TO PROVE THAT THE SAID UNSECURED LOANS HAVE BEEN REPAID IN FEW CASES IN THE SUBSEQUENT FINANCIAL YEARS. THEREFORE, WE SUBMIT THAT THERE IS NO REASON FOR THE AO TO DOUBT THE GENUIN ENESS OF TRANSACTIONS DESPITE FURNISHING NECESSARY EVIDENCES INCLUDING THEIR FINANCIAL STATEMENTS, BANK STATEMENTS AND IT RETURNS. THE ASSESSEE HAS ALSO RELIED UPON THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT V. ARCHID INDUSTRIES PVT. LTD., IN ITA.NO. 1433/MUM/2014 DATED 5 TH JULY 2017. THE HON'BLE BOMBAY HIGH COURT, AFTER CONSIDERING RELEVANT FACTS HELD THAT THE TRIBUNAL HAS CONSIDERED THAT THE ASSESSEE HAS PRODUCED ON RECORD THE DOCUMENTS TO ESTABLISH THE GENUINENESS OF THE PARTY SUCH AS PAN OF ALL THE CREDITORS ALONG WITH THE CONFIRMATION, THEIR BANK STATEMENTS SHOWING PAYMENT OF SHARE APPLICATION MONEY. THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT OF THESE PERSONS DISCLOSES THAT THESE PERSONS HAD SUFFICIENT FUNDS IN THEIR ACCOUNTS F OR INVESTING IN THE SHARES OF THE ASSESSEE. IN VIEW OF THESE DOCUMENTARY EVIDENCE, ONLY BECAUSE THOSE PERSONS HAD NOT APPEARED BEFORE THE ASSESSING OFFICER WOULD NOT NEGATE THE CASE OF THE ASSESSEE. SIR, WE JUST DRAW YOUR ATTENTION ON RECENT JUDGMENT WHERE OUR CLIENT RELIED (1) ITO VS NEELKANTH FINBUILD LTD (2009) ITA NO 2821/ DEL HONORABLE TRIBUNAL HAS HELD THAT ONCE IDENTITY OF CREDITOR IS PROVED THAN IT IS NOT THE BUSINESS OF ASSESSEE TO FIND OUT THE SOURCE OF THE MONEY OF CREDIT TO ACCOUNT. (2) INCOME TAX APPELLATE TRIBUNAL, BENCH 'C', KOLKATA ITA NO.L064/KOL/2011 : - FOR THE ASSESSMENT YEAR 2007 - 08 IN CASE OF NIVED ANOOPKUMAR DHANDHANIA, V/S I.T.O. WHERE IT IS HELD THAT 22 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., C.I.T.(APPEALS) ERRED AND ACTED INJUDICIOUSLY IN DOUBTING THE GENUINENESS OF AND CONFIRMING THE ADDITION OF UNSECURED LOANS FROM FIVE PARTIES TO THE APPELLANT'S TOTAL INCOME THOUGH THE TRANSACTIONS ARE ENTERED THROUGH BANKING CHANNELS AND THE ASSESSEE HAS DISCHARGED ITS ONUS OF IDENTIFICATION OF THE CREDITORS WITH PAN NOS., COP IES OF BALANCE SHEET AND BANK STATEMENTS (3) WE AS DRAW YOUR ATTENTION TO CBDT CIRCULAR NO. F. NO.286/2/2003/IT(INV) DATED 11.03.2003 HAS DIRECTED ITS OFFICES TO FOCUS ON COLLECTION OF EVIDENCE ON UNDISCLOSED INCOME AND NOT ON OBTAINING CONFESSION OF UNDIS CLOSED INCOME AND TO MAKE ADDITION. (4) THE HON'BLE SUPREME COURT IN THE CASE OF CIT V/S LOVELY EXPORTS 6 DTR 308 IT HAS HELD IF THERE IS BOGUS SHARE HOLDERS AND THEIR NAME ARE APPEARING IN BOOKS THAN DEPARTMENT IS FREE TO REOPEN INDIVIDUAL ASSESSMENT IN A CCORDANCE WITH LAW BUT IT CANNOT BE REGARDED AS UNDISCLOSED INCOME OF THE ASSESSEE COMPANY. (5) THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT V/C CREATIVE WORLD TELEFILMS LTD.333 ITR 100 HAS HELD AS UNDER: 'IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHARE HOLDERS WHOS NAME ARE GIVEN TO THE ASSESSING OFFICER THEN THE DEPARTMENT CAN ALWAYS PROCEED AGAINST THEM AND IF NECESSARY REOPEN THEIR INDIVIDUAL ASSESSMENTS. HELD, DISMISSING THE APPEAL, THAT THERE WAS NO DI SPUTE THAT THE ASSESSEE HAD GIVEN THE DETAILS OF NAMES AND ADDRESSES OF THE SHAREHOLDERS, THEIR PAN/GIR NUMBERS AND HAD ALSO GIVEN T HE C HEQUE NUMBERS, NAME OF THE BANK S. THE ASSESSING OFFICER OUGHT TO HAVE FOUND OUT THEIR DETAILS THROUGH PAN CARDS, BANK A CCOUNT HOLDERS, THUS, THE VIEW TAKEN BY THE TRIBUNAL COULD NOT BE FAULTED. (6) THE HON'BLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. ORISSA CORPORATION REPORTED IN 159 ITR 78 (SC) HAS HELD AS UNDER: 'THAT IN THIS CASE THE RESPONDENT HAD GIVEN THE NAMES AND ADDRESSES OF THE ALLEGED CREDITORS. IT WAS IN THE KNOWLEDGE OF THE REVENUE THAT THE SAID CREDITORS WERE INCOME - TAX ASSESSEE'S. THEIR INDEX NUMBERS WERE IN THE FILE OF THE REVENUE. THE REVENUE, APART FROM ISSUING NOTICE UNDER SECTION 131 AT THE INSTANC E OF THE RESPONDENT, DID NOT PURSUE THE MATTER FURTHER. THE REVENUE DID NOT EXAMINE THE SOURCE OF INCOME OF THE SAID ALLEGED CREDITORS TO FIND OUT WHETHER THEY ARE CREDITWORTHY. THERE WAS NO EFFORT MADE TO PURSUE THE SO - CALLED ALLEGED CREDITORS. IN THOSE C IRCUMSTANCES, THE RESPONDENT COULD NOT DO ANYTHING FURTHER. IN THE PREMISES, IF THE TRIBUNAL CAME TO THE CONCLUSION THAT THE RESPONDENT HAD DISCHARGED THE BURDEN THAT LAY ON IT, THEN IT COULD NOT BE SAID THAT SUCH CONCLUSION WAS UNREASONABLE OR PERVERSE OR BASED ON NO EVIDENCE'. (7) RAJASTHAN HIGH COURT IN CASE OF SHREE BARKHA SYNTHETICS LTD. [2006] 155 TAXMAN 289 (RAJ.)WHERE ASSESSEE - COMPANY HAD RECEIVED SHARE APPLICATION MONEY FROM A COMPANY AND FROM AN 23 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., INDIVIDUAL INVESTOR THROUGH BANKING CHANNELS AND HAD FURNISHED CONFIRMATION OF INVESTMENT IN SHARE CAPITAL BY SAID COMPANY AND HAD ALSO PROVED EXISTENCE OF SAID INDIVIDUAL INVESTOR, IT COULD BE SAID THAT ASSESSEE HAD PROVED GENUINENESS OF SAID TRANSACTION AND, THEREFORE, IT IS HELD, ASSESSING OFFICER CANNOT MAKE ANY ADDITION TO INCOME OF ASSESSEE IN RESPECT OF SAID SHARE APPLICATION MONEY BY TREATING SAME AS UNEXPLAINED CASH CREDIT UNDER SECTION 68. (8) CIT V. STELLER INVESTMENT LTD. [2001] 251 ITR 263/115 TAXMAN 99 (SC) WHERE THE SUPREME COURT HELD THAT EVE N IF IT WAS ARGUED THAT THE SUBSCRIBERS TO THE INCREASED CAPITAL WERE NOT GENUINE, UNDER NO CIRCUMSTANCES COULD THE AMOUNT OF SHARE CAPITAL BE REGARDED AS UNDISCLOSED INCOME. RELIANCE IS ALSO PLACED ON THE FOLLOWING DECISIONS: HON'BLE DELHI HIGH COURT IN CASE OF COMMISSIONER OF INCOME TAX V/S VALUE CAPITAL SERVICES P.LTD.(2008) 307 ITR 334 (DELHI). HON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX V/S GP INTERNATIONAL LTD. (2010) 325 ITR 25 (P&H) H ON'BLE MADRAS HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX V/S ELECTRO POLYCHEM LTD. (20047) 294 ITR 661 (MAD). HON'B;E RAJASTHAN HIGH COURT IN CASE OF COMMISSIONER OF INCOME TAX V/S AKJ GRANITES P.LTD.(2008) 301 ITR 298 (RAJ.) HON'BLE DELHI HIGH COURT IN CASE OF COMMISSIONER OF INCOME TAX V/S OASIS HOSPITALITIES (PVT.) LTD. (2011) 51 DTR 74 (DELHI). 19. IT IS A SETTLED LAW THAT IT IS MANDATORY FOR THE ASSESSING OFFICER TO CONFRONT THE ASSESSEE WITH ANY MATERIAL COLLECTED BY THE ASSESSING OFFICER A T THE BACK OF THE ASSESSEE, AND IN CASE OF STATEMENT OF THIRD PARTY RECORDED AT THE BACK OF THE ASSESSEE, OPPORTUNITY OF CROSS EXAMINATION HAS TO BE OFFERED TO THE ASSESSEE, FAILING WHICH THE SAID MATE RIAL/STATEMENT ETC. WILL BE RENDERED UNRELIABLE AND ADD ITIONS MADE ON THE BASIS OF SUCH MATERIAL/STATEMENT ETC. SHALL BE RENDERED ILLEGAL. REFERENCE IN THIS REGARD CAN BE MADE FROM THE DECISIONS MADE IN THE FOLLOWING JUDICIARY RULING: - R.B. SHREERAMDURGA PRASAD 176 ITR 169 (SC), KISHANCHANDCHELLARAM VS. C.I.T. (1980) 125 ITR 713 (SC) JINDAL VEGETABLE (ORDER OF HON'BLE DELHI HIGH COURT IN ITA NO. 428 OF 2007, 174 TAXMANN 440 (RAJ.) LAXMANBHAI PATEL (ORDER OF HON'BLE GUJARAT HIGH COURT DATED 22.07.2008 IN ITR NO. 41/1997). 20. SHRI PRAVIN KUMAR AGARWAL WAS NEVER A DIRECTOR AS WELL AS SHAREHOLDER OF LENDER COMPANIES, FROM WHOM THE APPELLANT COMPANY HAS RECEIVED THE UNSECURED LOAN AMOUNTING TO RS. 1,30,00,000/ - OF DAFFODIL TRADERS PVT. LTD. AND SURAKHA PRODUCTS PVT. LTD. DURING TH E SAID ASSESSMENT YEAR. 24 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., 21. A PERSON (PRAVEEN KUMAR AGARWAL), WHO IS NEITHER HOLDING MANAGERIAL BERTH IN THE LENDER COMPANY NOR HOLDING ANY OWNERSHIP RIGHTS, CANNOT CONTROL THE AFFAIRS OF THE LENDER COMPANY. 22. FURTHER, FOLLOWING LEGAL POSITION/ JUDICIAL RULINGS ON THE SUBJECT UNDER CONSIDERATION MUST BE CONSIDERED BEFORE ARRIVING AT ANY CONCLUSION: - A. IT IS ALSO SETTLED LAW THAT WHERE THE ASSESSEE PROVIDES IDENTITY AND DETAILS PERTAINING TO THE LENDERS/ CREDITORS/ INVESTOR OF SHARE APPLICATION MONEY AND IS UNABLE TO PRODUCE THEM AND REQUESTS THE CIT(A) TO ISSUE SUMMONS U/S 131 FOR THEIR ATTENDANCE, IT IS THE DUTY OF THE CIT(A) TO ISSUE SUCH SUMMONS, FAILING WHICH THE ADDITION WOULD GET DELETED. REFERENCE IN THIS REGARD CAN BE MADE FROM THE DECISIONS MADE IN THE FOLLOWING JUDICIARY RULING: - N.P. GARODIA (ORDER DATED 13.01.2009 OF HON'BLE P & H HIGH COURT IN ITA NO. 808 OF 2008) BRIJ PAL SHARMA (ORDER DATEDL7.02.2009 IN ITA NO. 685 OF 2008 OF HON'BLE P & H HIGH COURT) B. SIMILARLY AS HELD IN THE CASE OF CIT V. METACHEM INDUSTRIES (2000) 245 ITR 160 (MP) WHERE A CREDIT IS SHOWN TO HAVE COME FROM A PERSON OTHER THAN THE ASSESSEE, THERE IS NO FURTHER RESPONSIBILITY OF THE ASSESSEE TO SHOW THAT IT HAS COME FROM ACCOUNTED SOURC E OF THE LENDER, AS LONG AS THE FACT THAT HE HAD MADE THE ADVANCE AND WAS CAPABLE OF MAKING THE ADVANCE ARE ESTABLISHED. C. IT WAS HELD BY THE HON'BLE MADRAS HIGH COURT IN HASTIMAL (S) V. CIT (1963) 49 ITR 273 THAT AFTER A LAPSE OF DECADE, THE ASSESSEE SHO ULD NOT BE PLACED UPON THE RACK AND CALLED UPON TO EXPLAIN NOT MERELY THE ORIGIN AND SOURCE OF A CAPITAL CONTRIBUTION, BUT ALSO THE ORIGIN OF ORIGIN AND SOURCE OF THE SOURCE. D. RECENTLY IN A SIMILAR/ IDENTICAL CASE THAT OF THE ASSESSEE, THE HONORABLE ITAT DELHI IN THE CASE OF ITO, WARD 15 (2) VS. M/S. RAKAM MONEY MATTERS P. LTD. HAS HELD THAT 'CIT(A) HAS TO BRING ON RECORD ANY VALID MATERIAL OR EVIDENCE TO DISCREDIT THE EVIDENCES AND THE EXPLANATION GIVEN BY THE ASSESSEE COMPANY AND CANNOT RELY ONLY ON STA TEMENT OF THIRD PARTIES RECORDED BY THE INVESTIGATION WING. E. IN ANOTHER LANDMARK JUDGMENT OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF VARSHABEN S PATEL VS. ITO,[2015] 64 TAXMANN.COM 179 (GUJARAT) HAS ALSO HELD IN NOTICE U/S 148 THAT THE ISSUE OF NOTICE U/S 148 PURSUANT TO DIRECTION BY DG INVESTIGATION IS BAD IN LAW AS THE SATISFACTION HAS TO BE ON YOUR OWN AND NOT A BORROWED SATISFACTION. HEAD NOTE IS AS UNDER: 25 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., F. AS HELD IN THE CASE OF R.B. MITTAL V. CIT 246 ITR 283 (AP) IN AN ENQUIRY U/S 68, THE RULE O F AUDI ALTERANT PARTERM HAS TO BE OBSERVED AND THE ASSESSEE MUST BE GIVEN A FAIR AND REASONABLE HEARING TO DISCHARGE THE BURDEN CAST ON HIM U/S 68 OF THE ACT. FURTHER, IT IS SETTLED LAW THAT IN THE MATTER OF CASH CREDIT, THE INITIAL ONUS LIES ON THE ASSESS EE TO PROVE THE GENUINENESS OF THE TRANSACTION ALONG WITH THE IDENTITY OF THE LENDER/INVESTOR AND HIS CREDITWORTHINESS. HAVING DONE SO, THE APPELLANT IN THE INSTANT CASE HAS DISCHARGED THE ONUS CAST UPON IT. BEYOND THIS, FOR THE CHARGE OF UNEXPLAINED CASH CREDIT TO STICK, THE ONUS LIES ON THE CIT(A) TO DISPROVE THE CLAIM OF THE ASSESSEE BY ESTABLISHING THAT THE EVIDENCE FILED BY THE ASSESSEE WAS FALSE AND BY BRINGING NEW MATERIAL ON RECORD AND FAILURE TO DO SO WOULD VITIATE THE ADDITION MADE ON THIS COUNT. G. IT WAS ALSO HELD IN THE CASE OF CIT V. BEDI & CO. P. LTD. (1998) 230 ITR 580 (SC) THAT WHERE PRIMA - FACIE THE INFERENCE ON FACTS IS THAT THE ASSESSEE'S EXPLANATION IS PROBABLE, THE ONUS WILL SHIFT TO THE REVENUE TO DISPROVE IT AND THE ASSESSEE 1 S EXPLANATION IN SUCH CASE CANNOT BE REJECTED ON MERE SURMISES. OTHER SIMILAR JUDICIARY RULING ARE AS UNDER : - KHANDELWAL CONSTRUCTIONS V. CIT (1997) 227 ITR 900 (GAU.) CIT V. ORISSA CORPORATION PVT. LTD. 158 ITR 78 (SC) CIT V. ROHINI BUILDERS 256 ITR 360 (GUJ.). H. IT IS ALSO SETTLED LAW THAT IT IS MANDATORY FOR THE CIT(A) TO CONFRONT THE ASSESSEE WITH ANY MATERIAL COLLECTED BY THE CIT (A) AT THE BACK OF THE ASSESSEE, AND IN CASE OF STATEMENT OF THIRD PARTY RECORDED AT THE BACK OF THE ASSESSEE, OPPORTUNITY OF CROSS EXAMINATION HAS TO BE OFFERED TO THE ASSESSEE, FAILING WHICH THE SAID MATERIAL/STATEMENT ETC. WILL BE RENDERED UNRELIABLE AND ADDITIONS MADE ON THE BASIS OF SUCH MATERIAL/STATEMENT ETC. SHALL BE RENDERED ILLEGAL. REFERENCE IN THIS REGARD CAN BE MADE FROM THE DECISIONS MADE IN THE FOLLOWING JUDICIARY RULING: - R.B. SHREERAMDURGA PRASAD 176 ITR 169 (SC), KISHANCHANDCHELLARAM VS. C.I.T. (1980) 125 ITR 713 (SC) JINDAL VEGETABLE (ORDER OF HON'BLE DELHI HIGH COURT IN ITA NO. 428 OF 2007, 174 TAXMANN 440 (RAJ.) LAXMANBHAI PATEL (ORDER OF HON'BLE GUJARAT HIGH COURT DATED 22.07.2008 IN ITR NO. 41/1997). I. IT WAS HELD IN CASE OF ITA - .5589/MUM/2017 ACIT 30(3) VS. M/S SHREEDHAM CONSTRUCTION PVT. LTD. ON 22.06.18 WHEREIN SAME P ARTIES HAVE GIVEN UNSECURED LOAN AND ADDITION WAS DELETED - 26 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., '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). IDENTICA LLY 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. (PAGES 120 TO 131 OF THE PAPER BOOK). ALL THESE DOCUMENTS NEITHER DISPROVED BY THE LD. ASSESSING OFFICER NOR ANY EVIDENCE WAS BROUGHT ON RECO RD TO FALSIFY THE CLAIM OF THE ASSESSEE OR THE AUTHENTICITY OF THESE DOCUMENTS. 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 LOAN S. IT IS ALSO NOTED THAT SO FAR AS THE DISALLOWANCE OF INTEREST PORTION IS CONCERNED, THE SAME WAS DELETED BY THE ID. FAA AND HAS NOT BEEN CHALLENGED BEFORE THIS TRIBUNAL BY THE REVENUE FURTHER FORTIFIES THE CASE OF THE ASSESSEE. THE LOANS WERE REPAID ALON G 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 OFFI CER 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 ID. ASSESSING OFFIC ER. 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 CIRCUMSTANC ES, 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. ' J. IT WAS HELD IN CASE OF DCIT 12(1)(2) VS. BAIRAGRA BUILDERS P LTD. [ITA NO. 4691 & 4692/MUM/2015] 'WE HAVE GONE THROUGH THE ORDERS RELIED UPON BY THE LEARNED DR. WE NOTED THAT THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF BIKRAM SINGH, THE ASSESSEE COULD NOT DISCHARGE THE 27 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., ONUS AS LAID DOWN BY SECTION 68 OF THE ACT. SIMILARLY, IN THE CASE OF CIT VS. JANSAMPARK ADVERTISING & MARKETING PVT LTD. (SUPRA), THE ADDITIONS HAVE BEEN MA DE U/S. 68 IN RESPECT OF THE SHARE CAPITAL RECEIVED BY THE ASSESSEE FROM VARIOUS COMPANIES AND DURING THE COURSE OF INVESTIGATION, IT WAS FOUND THAT THE SHARE CAPITAL HAS BEEN RECEIVED FROM THREE ENTRY OPERATORS, WHO ARE ALLEGEDLY IN THE BUSINESS OF PROVID ING ACCOMMODATION ENTRIES. NOTICES ISSUED U/S. 131 TO THESE PARTIES WERE RETURNED UNDELIVERED BY THE POSTAL AUTHORITIES WITH THE REMARK 'LEFT'/ 'NO SUCH PERSON'. UNDER THESE CIRCUMSTANCES, THE HON'BLE HIGH COURT TOOK A VIEW THAT THE ASSESSEE FAILED TO DISC HARGE THE BURDEN TO PROVE THE CREDITWORTHINESS AS WELL AS THE GENUINENESS OF THE TRANSACTIONS. 10. BUT IN THE IMPUGNED CASE, WE NOTED THAT THE ASSESSEE HAS SUBMITTED ALL THE EVIDENCES INCLUDING THE CONFIRMATION OF THE CREDITORS. THIS IS NOT A CASE WHERE TH E CREDITORS HAVE NOT GIVEN CONFIRMATIONS RATHER THEY HAVE DULY CONFIRMED TO GIVING LOAN TO THE ASSESSEE, THE LOANS WERE RECEIVED AND RETURNED THROUGH BANKING CHANNELS. THE ASSESSEE HAS ALSO SUBMITTED COPIES OF BANK ACCOUNTS. THE LENDER HAS NOT DEPOSITED CA SH INTO BANK ACCOUNT. THE ASSESSEE HAS DULY DISCHARGED THE ONUS WITH REGARD TO IDENTITY OF THE LENDER, CREDIT WORTHINESS OF THE PARTY AND ALL SUPPORTING EVIDENCES AS REQUIRED U/S. 68 OF THE I.T.ACT. THEREFORE, IN OUR OPINION THE DECISIONS RELIED UPON BY TH E DR DOES NOT ASSIST THE REVENUE TO THE FACTS OF THE PRESENT CASE. 11. WE HAVE ALSO GONE THROUGH THE DECISIONS RELIED UPON BY THE LEARNED AR. WE NOTED THAT THIS TRIBUNAL IN SIMILAR CIRCUMSTANCES IN THE CASE OFKOMAL AGROTECH PVT. LTD. VS. ITO IN ITA NO. 437 /HYD/2016 VIDE ITS ORDER DATED 25.11.2016 HAS HELD AS UNDER 'A PLAIN READING OF THE ASSESSMENT ORDER DEMONSTRATES THAT THE CIT(A) MERELY WENT BY THE INVESTIGATION DONE BY THE OFFICE OF D.G.I(INVESTIGATION), MUMBAI. NO ENQUIRIES OR INVESTIGATION WAS CARRIED OUT. NO EVIDENCE TO CONTROVERT THE CLAIMS OF THE ASSESSEE WAS BROUGHT ON THE RECORD BY THE CIT(A). EVEN THE STATEMENT OF SHRI PRAVEEN KUMAR WAS SUPPLIED. NOTHING IS ON RECORD ABOUT THE RESULT IF INVESTIGATIONS DONE BY DGIT (INV), MUMBAI. THE PAPERS FILED BY THE ASSESSEE DO DEMONSTRATE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. THE ADDITION IS MADE MERELY ON SURMISES AND CONJECTURES. IN VIEW OF THE ABOVE, WE HOLD THAT THE ADDITION MADE UNDER SECTION 68 OF THE ACT IS BAD IN LAW.' 12. BEING CONSISTENT WITH THE VIEW TAKEN BY THIS CO - ORDINATE BENCH IN CASE OFKOMAL AGRO TECHPVT. LTD . (SUPRA), AND IN VIEW OF THE FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDERS OF THE CIT(A). IT IS ACCORDINGLY, CONFIRMED FOR BOTH THE YEARS UNDER APPEAL.' K. IT WAS HELD IN CASE OF ITO 4(3)(4), MUMBAI VS SUCHITRA FABTEX P.LTD, [ITA NO. 2979 & 2980/MUM/2017] - 28 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., 'ANSH MERCHANDISE PVT .LTD. (EARLIER KNOWN AS NEW PLANET TRADING CO. PVT. LTD.) THUS, AFTER CAREFUL CONSIDERATIONS OF THE ENTIRE MATERIAL ON RECORD, WHICH MAY ALSO BE EVIDENT FROM THE ABOVE GIVEN CHART, IT IS FOUND THAT THE APPELLANT HAS INDEED PROVEN THE GENUINENESS OF THE LOANS TAKEN FROM ALL THE PARTIES REFERRED ABOVE. ACCORDINGLY THE ADDITION MADE BY THE CIT(A) UNDER SECTION 68 OF THE ACT ON THAT COUNT TO THE TUNE OF RS 40,00,000 / - UNDER THE HEADING LOAN AS CASH CREDIT CANNOT BE SUSTAINED. CONSEQUENTLY, THE ADDITION OF RS. 1,51,694/ - MADE UNDER SECTION 37(1) OF THE ACT ON ACCOUNT OF DISALLOWANCE OF INTEREST ON THE SAID AMOUNT ALSO CANNOT BE SUSTAINED. 5.1 NOTICE THAT THE LD CIT(A) HAS PASSED A DETAILED ORDER BY EXAMINING THE FACTS RELATING TO THE ISSUES UNDER CONSIDERATION AND ALSO APPLYING THE LAW SETTLED BY HON'BLE CO URTS IN THIS REGARD. I NOTICE THAT THE REVENUE COULD NOT FURNISH ANY MATERIAL ON RECORD TO REBUT THE REASONING GIVEN BY LD CIT(A). UNDER THESE SET OF FACTS, I AM OF THE VIEW THAT THE ORDERS PASSED BY LD CIT(A) DO NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY I UPHOLD THE SAME IN BOTH THE YEARS UNDER CONSIDERATION.' I IN A LANDMARK DECISION BY HON'BLE ITAT MUMBAI, IN AN IDENTICAL CASE OF ITO - 10 (2) (4) VS. M/S. SUPERLINE CONSTRUCTION P. LTD. (AND MANY OTHERS IN THIS CONSOLIDATED ORDER) PRONOUNCED ON 30.11.2015 ITA NO. 3645/MUM/2014, THE SUMMARY OF THE CASE IS OUTLINED AS UNDER : - 'THE REVENUE AUTHORITY FAILED TO APPRECIATE THAT THERE IS NO DOCUMENTARY EVIDENCE AGAINST THE ASSESSEE COMPANY TO SUPPORT IMPUGNED ADDITIONS MADE SOLELY ON THE BASIS OF STATEMENT OF SHRI MUKESH CHOKSHI. THE ASSESSING OFFICER FAILED TO APPRECIATE THAT AS AG AINST THE STATEMENTS OF ANY PERSON RECORDED U/S 143(3) R.W.S. 147, THE ASSESSEE COMPANY HAS FULLY DISCHARGED THE BURDEN OF PROOF, ONUS OF PROOF AND ESTABLISHED THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTION BY BANKING INSTRUMENTS WITH DOCUME NTARY EVIDENCES.' THE FACTS OF THE ABOVE CASE ARE VERY SIMILAR TO T HE CASE UNDER CONSIDERATION AND RATIO DECIDED IN THE CASE IS REQUESTED TO BE APPLIED. FURTHER WITH THE SIMILAR FACTS, SIMILAR JUDGMENTS WERE PRONOUNCED AND ARE HEREBY OUTLINED AS UNDER: - ITAT E BENCH IN M/S. SDB ESTATE PVT LTD VS. ITO - (5)(3)(2) IN ITA NO. 584/MUM/2015: AY 2008 - 09 HAS DECIDED SIMILAR ISSUE BY OBSERVING AS UNDER: - 'IN VIEW OF THE ABOVE STATED LEGAL POSITION AND IN THE LIGHT OF RELIABLE EVIDENCES BROUGHT ON RECORD BY ASSESSEE TO 29 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., SUBSTANTIATE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF SHAREHOLDERS/ LENDERS, WHICH HAVE NOT BEEN CONTROVERTER BY THE REVENUE, THE ADDITIONS MADE SOLELY ON THE BASIS OF GENERAL STATEMENT OF SHRI MUKESH CHOKSHI CANNOT BE HELD TO BE JUSTIFIED AND THE SAME ARE ACCORDINGLY ORDERED TO BE DELETED. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART, IN TERMS INDICATED HEREINABOVE.' THE FOLLOWING CASES IN FAVOUR OF THE ASSESSEE ON SIMILAR ISSUES. A) ITO - 10(2)(1) VS. M/S. DEEP DARSHAN PROPERTIES PVT LTD IN ITA NO. 2117/MUM/2014 : AY 2006 - 07 AND ITA NO.2118/MUM/2014 : AY 2007 - 08 B) ITO - 10(2)(3) VS. AAJIVAN COMPUTERS PVT LTD IN ITA NO.2160/MUM/2014 :AY 2006 - 07 C) ITO - 10(2)(3) VS. DIGNITY SECURITIES TRADING PVT LTD IN ITA NO.2157/MUM/20 14 :AY 2006 - 07 D) ITO - 10(2)(1) VS. M/S. BLUE HILL PROPERTIES PVT LTD IN ITA NO.2119/MUM/2014 :AY 2006 - 07 WITH THE FACTS AND VARIOUS JUDICIAL RULINGS AS DISCUSSED ABOVE, IT IS CRYSTAL CLEAR THAT THE UNSECURED LOAN RECEIVED BY THE APPELLANT WAS GENUINE AND CANNOT BE TREATED AS ACCOMMODATION ENTRY. M. JURISDICTIONAL HON'BLE ITAT, MUMBAI FOR AN IDENTICAL CASE I.E. ARCELI REALTY LIMITED VS. THE INCOME TAX OFFICER 15(1) (1), MUMBAI PRONOUNCED ON 21.04.2017 ITA - 6492/MUM/2016 - 17, THE SUMMARY OF THE CASE IS OUTLIN ED AS UNDER: - '........A.O. MERELY RELIED UPON THE INFORMATION PROVIDED BYTHE OFFICE OF DGIT ( LNV .), MUMBAI AND DID NOT MADE ANY INDEPENDENT ENQUIRY. THE PAPERS FILED BY THE ASSESSE DO DEMONSTRATE THE IDENTITY, CREDIT WORTHINESS, GENUINENESS, SOURCE OF SOURCE OF THE TRANSACTION. CIT(A) DID NOT PROVIDE OPPORTUNITY TO CROSS EXAMINE THE CONCERNED PERSON AND ALSO THE DEPARTMENT HAS NOT PROVIDED AUTHENTICITY OF THE INFORMATION TO THE PERSON AGAINST WHOM SUCH INFORMATION IS USED. THE ADDITION IS MADE MERELY ON SURMISES AND CONJECTURES. THE STATEMENT RECORDED AT THE BACK OF THE APPELLANT CANNOT BE UTILIZED IG NORING OTHER VERIFIABLE EVIDENCES. THE ID. ASSESSING OFFICER HAS MAD E THE ADDITION OF RS. 20,00,000 / - DISREGARDING THE EVIDENCES ON RECORD AND WITHOUT DISCHARGING HER ONUS AND WITHOUT ESTABLISHING ANYTHING CONTRARY TO THE AGREEMENT OF THE APPELLANT AND WIT HOUT VERIFYING THE BANK ACCOUNT, EXISTENCE OF INVESTOR AND WITHOUT MAKING FRUITFUL INVESTIGATION, THUS THE DEMAND WAS DIRECTED TO BE DELETED. ' 30 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., N. JURISDICTIONAL HON'BLE ITAT, MUMBAI FOR AN IDENTICAL CASE I.E. INCOME TAX OFFICER, 12(2)(3) VS. M/S SHREEDHAM CONSTRUCTION PVT. LTD. ON 14.11.2017 ITA - 3754/3755/3756/MUM/2017, THE SUMMARY OF THE CASE IS OUTLINED AS UNDER : - 'WE HAVE CONSIDERED THE RIVAL SU BMISSIONS OF THE PARTIES AND HAVE GONE THROUGH THE MATERIAL AND THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE NOTED THAT THE ASSESSING OFFICER PASSED THE ASSESSMENT ORDER ON THE SIMILAR LINES AS MADE FOR EARLIER YEAR. THE ASSESSING OFFICER HAS NOT GIVEN SPE CIFIC FINDING ON THE DOCUMENTARY EVIDENCES FURNISHED BY THE ASSESSEE. THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER HAS NOT GIVEN DIFFERENT FINDING THOUGH THE FACTS FOR THE YEAR UNDER CONSIDERATION WERE AT VARIANCE. THE ASSESSEE SPECIFICALLY CON TENTED THAT THEY HAVE PAID INTEREST ON THE LOAN AVAILED AND DEDUCTED TDS. THE ID COMMISSIONER (APPEALS) WHILE CONSIDERING THE FACTS NOTED THAT THE ASSESSING OFFICER HAS NOT CORRECTLY APPRECIATED THE LOAN AMOUNT FROM RAGHUVEER SALES NOR ITS SHARE CAPITAL AN D RESERVE FUNDS. SIMILAR, OTHER DISCREPANCIES WERE POINTED OUT ABOUT VIRAJMERCHANTILE P. LTD, PARK TOOLS LTD AND UTAKANTHA TRADING & PROPERTIES LTD. IN VIEW OF THE ABOVE DISCUSSION WE DO NOT FIND ANY INFIRMITY AND ILLEGALITY AND WE HAVE ALREADY CONFIRMED THE ORDER PASSED BY ID CIT(A) FOR AY 2008 - 09 AND 2009 - 10, HENCE, THE APPEAL FOR THE YEAR CONSIDERATION IS ALSO DISMISSED WITH SIMILAR OBSERVATION.' O. RECENT JUDGMENT DELIVERED BY JURISDICTIONAL HON'BLE ITAT, MUMBAI FOR AN IDENTICAL CASE I.E., M/S SHREE LA XMI ESTATE PVT. LTD. V/S. INCOME TAX OFFICER 15(3)(3) ON 29.12.2017 ITA - 5954/MUM/2016, THE SUMMARY OF THE CASE IS OUTLINED AS UNDER: - 'WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BEL OW. THE CIT(A) MADE ADDITION TOWARDS UNSECURED LOANS RECEIVED FROM JOSH TRADING COMPANY PVT LTD. AND VIRAJ MERCANTILE PVT LTD ON THE BASIS OF INFORMATION RECEIVED FROM INVESTIGATION WING WHICH REVEALED THAT THE ASSESSEE IS BENEFICIARY OF BOGUS ACCOMMODATI ON ENTRIES PROVIDED BY SHRI PRAVEEN KUMAR JAIN THROUGH HIS BOGUS COMPANIES.................. THE CIT(A) HAS BROUGHT OUT FACTS IN THE LIGHT OF STATEMENT OF SHRI PRAVIN KUMAR JAIN DEPOSED BEFORE THE INVESTIGATION WING TO MAKE ADDITION. EXCEPT THIS THERE IS N O CONTRARY EVIDENCE IN THE POSSESSION OF THE CIT(A) TO DISPROVE THE LOAN TRANSACTION FROM JOSH TRADING COMPANY PVT. LTD. AND VIRAJ MERCANTILE PVT. LTD. ON THE OTHER HAND, THE ASSESSEE HAS FURNISHED VARIOUS DETAILS INCLUDING CONFIRMATION LETTERS FROM THE P ARTIES, 31 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., THEIR BANK STATEMENTS ALONG WITH THEIR FINANCIAL STATEMENTS TO PROVE IDENTITY, GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE PARTIES. THE ASSESSEE ALSO FURNISHED EVIDENCES TO PROVE THAT THE PARTIES HAVE RESPONDED TO THE NOTICES ISSUE D U/S 133(6) BY CIT(A) BY FILING VARIOUS DETAILS' '............IT IS WELL SETTLED LEGAL POSITION THAT THE ASSESSEE HAS TO DISCHARGE 3 MAIN INGREDIENTS IN ORDER TO DISCHARGE THE INITIAL BURDEN OF PROOF, I.E. THE IDENTITY OF THE CREDITOR 9 THE GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF THE CREDITORS. ONCE THE ASSESSEE DISCHARGES INITIAL BURDEN PLACED UPON HIM, THEN THE BURDEN TO DISPROVE THE SAID CLAIM SHIFTS UPON THE CIT(A)' 'COMING TO THE CASE LAWS RELIED UPON THE ASSESSEE, THE ASSESSEE HAS RELIED U PON THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS GAGANDEEP INFRASTRUCTURE PVT. LTD (2017) 394 ITR680 (BOM). WE HAVE GONE THROUGH THE CASE LAWS RELIED UPON BY THE ASSESSEE IN THE LIGHT OF FACTS OF THE PRESENT CASE AND FIND THAT THE HON'BL E HIGH COURT CATEGORICALLY OBSERVED THAT '..........THE THREE ESSENTIAL TESTS WHILE CONFIRMING THE PRE PROVISO SECTION 68 OF THE ACT LAID DOWN BY THE COURTS NAMELY THE GENUINENESS OF THE TRANSACTION, IDENTITY AND THE CAPACITY OF THE INVESTOR HAVE ALL BEEN EXAMINED BY THE IMPUGNED ORDER OF THE TRIBUNAL AND ON FACTS IT WAS FOUND SATISFIED. FURTHER IT WAS A SUBMISSION ON BEHALF OF THE REVENUE THAT SUCH LARGE AMOUNT OF SHARE PREMIUM GIVES RISE TO SUSPICION ON THE GENUINENESS (IDENTITY) OF THE SHAREHOLDERS I.E. THEY ARE BOGUS. THE APEX COURT IN LOVELY EXPORTS (P) LTD. (SUPRA) IN THE CONTEXT TO THE PRE - AMENDED SECTION 68 OF THE ACT HAS HELD THAT WHERE THE REVENUE URGES THAT THE AMOUNT OF SHARE APPLICATION MONEY HAS BEEN RECEIVED FROM BOGUS SHAREHOLDERS THEN IT IS FOR THE INCOME TAX OFFICER TO PROCEED BY REOPENING THE ASSESSMENT OF SUCH SHAREHOLDERS AND ASSESSING THEM TO TAX IN ACCORDANCE WITH LAW. IT DOES NOT ENTITLE THE REVENUE TO ADD THE SAME TO THE ASSESSEE'S INCOME AS UNEXPLAINED CASH CREDIT.' IT IS NOT OUT OF PLACE TO BRING UNDER YOUR HON'BLE MEMBERS KIND NOTICE, THAT THE APPELLANT HAS DISCHARGED THE ONUS CAST UPON IT U/S 68 OF THE ACT BY SUBMITTING THE NUMBER OF DOCUMENTARY EVIDENCES DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE LD. CIT(A) HAS FAILED TO DEMONSTRATE AND ESTABLISH THAT HOW THE IMPUGNED ADDITION OF RS. 6,0000,000/ - WAS TREATED AS UNEXPLAINED CASH CREDIT. 23. THE LD. CIT(A) HAS ERRED IN MAKING THE FURTHER ADDITION U/S. 69C OF THE I.T. ACT., 1961 AMOUNTING RS.13,85,475/ - AS UNEXPLAINED EXPENDITURE PAID IN CASH. THIS ADDITION IS HYPOTHETICAL AND IMAGINARY IN NATURE AND APPELLANT HAD NOT PAID ANY SORT OF COMMISSION FOR THE SAID GENUINE BORROWINGS. 32 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., IN VIEW OF THE ABOVE, THE APPEAL OF THE ASSESSEE DESERVES TO BE ALLOWED. HUMBLE P RAYER THE UNSECURED LOAN IS GENUINE AND DULY SUPPORTED BY DOCUMENTARY EVIDENCE. HENCE, THE ADDITION OF RS. 6,13,85,475/ - MADE BY THE LD. CIT(A) REQUIRES TO BE DELETED AS THE SAME WAS ON ASSUMPTION BASIS WHICH DOES NOT HAVE ANY STAND IN LAW AND REQUIRES TO BE DELETED. THEREFORE, WE REQUEST YOUR HONOR TO KINDLY DELETE THE ADDITIONS MADE. 12. ON THE OTHER HAND, LD DR RELIED ON THE ORDERS PASSED BY THE REVENUE AUTHORITIES. 13. CONSIDERED THE RIVAL SUBMISSIONS AND MATERIAL PLACE D ON RECORD. WE NOTICE THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF PROVIDING SECURITY PERSONALS CONSISTING OF SECURITY GUARDS TO PROVIDE SECURITY TO VARIOUS I NDUSTRIES, INDIVIDUALS ETC . DURING THIS YEAR, ASSESSEE HAS TAKEN UNSECURED LOANS FR OM 7 PARTIES TO THE EXTENT OF 6 CRORES AND THE DETAILS ARE ALREADY PLACED ON RECORD. ALL THESE COMPANIES GAVE THE UNSECURED LOANS THROUGH THE BANKING CHANNEL AND THE ASSESSEE HAS ALREADY DECLARED THE DETAILS OF THE PARTIES IN ITS TAX AUDIT REPORT WITH THE DETAILS LIKE ADDRESS, PAN AND D ETAILS OF LOAN TAKEN. IN ORDER TO VERIFY, THE ASSESSING OFFICER ISSUED THE SHOW CAUSE NOTICE AND SUMMONS TO ALL THE PARTIES . SUBSEQUENTLY, IT IS CAME TO THE KNOWLEDGE OF THE AO THAT SOME OF THE ADDRESSES DECLARED BY THE ASSESSEE ARE NOT CORRECT WHEN THE AS SESSEE WAS CONTACTED, ASSESSEE WAS ABLE TO PROVIDE PROPER ADDRESSES AND FURTHER , ASSESSEE ALSO SUBMITTED THE FINANCIAL STATEMENTS, AUDIT REPORT, 33 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., RETURN OF INCOME FILED BY THEM, THE DETAILS AS DISCLOSED IN MCA PORTALS AND MORE IMPORTANTLY CONFIRMATION LETTE RS FROM ALL THE PARTIES. WE NOTICED THAT ASSESSING OFFICER HAS MADE DETAILED VERIFICATION BY ISSUE OF SHOW CAUSE NOTICE S AND ALSO COMMISSIONS UNDER SECTION 131 (D) FOR THE PARTIES IN THE OTHER STATES. 14. FROM THE SUBMISSIONS OF THE ASSESSING OFFICER, WE NOTIC ED THAT IN THE CASE OF SURAKSHA PROJECTS PRIVATE LIMITED, HE OBSERVED FROM THE STATEMENT OF SHRI PRAVEEN AGARWAL, IN WHICH SHRI PRAVEEN AGARWAL WAS DISCUSSING ABOUT THE ERSTWHILE DIRECTORS , NOT ABOUT PRESENT DIRECTORS AND AO DID NOT FOUND ANY DISCREPANCIES WITH REGARD TO CURRENT DIRECTORS, NOR THERE IS ANY EVIDENCE ON RECORD AGAINST THE CURRENT DIRECTORS. BASED ON THE STATEMENT OF SHRI PRAVEEN AGARWAL, HE TREATED THIS COMPANY AS SHELL COMPANY. IT IS MERE ASSUMPTION OF THE AO MERELY BECAUSE THERE IS SOME CON NECTION WITH SHRI PRAVEEN AGARWAL WITH THIS COMPANY IN THE PAST AND ALSO IT WAS CONTENTION OF THE AO, NO COMPANY CAN GIVE LOAN WITHOUT HAVING TURNOVER OR HAVING PROFIT FROM THE ACTIVITIES CARRIED ON BY THE RESPECTIVE COMPANIES . ON THE OTHER HAND, IT IS BRO UGHT ON RECORD BY THE ASSESSEE THAT THIS COMPANY HAS ACHIEVED TURNOVER OF 14,73,44, 805/ AND HAVING CAPITAL OF 33 LAKHS AND RESERVES OF 13,73,50,459/ AND IT HAS GIVEN UNSECURED LOAN OF 53 LAKHS ONLY. AGAINST THIS , ASSESSEE HAS PAID INTEREST OF 9 3,924/ DURING THIS YEAR. 34 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., 15. THE ABOVE INFORMATION IS AGAINST THE OWN CONCLUSION OF AO THAT THE COMPANY CAN GIVE LOAN ONLY WHEN THEY HAV E PROPER BUSINESS ON RECORD AND PROFIT . FROM THE RECORDS SUBMITTED BEFORE US, ALL THE PARTIES HAVING SUBSTANTIAL TURNOVER ACHIEVED BY THEM DURING THIS YEAR EXCEPT THE COMPANY M/S DAFFODIL TRADERS PRIVATE LIM ITED AND IT HAS ACHIEVED ONLY 19,09, 222/ . AT THE SAME TIME, WE NOTICED THAT ALL THE COMPANIES WHO HAS GIVEN UNSECURED LOANS TO THE ASSESSEE ARE HAVING HUGE RESERVES AND CAPITAL. 16. FURTHER AO DID NOT DISPUTE WITH THE FACT ON RECORD THAT ALL THESE COMPANIES HAVE HUGE RESERVES AND SURPLUSES IN THE BALANCE SHEET AND THESE COMPANIES ARE IN EXISTENCE AS PER THE INFORMATION AVAILABLE IN MCA WEBSITE. AO FURTHER OBSERVED THAT ALL THESE COMPANIES EXCEPT A FEW HAVE NOT DECLARED SIZABL E PROFIT IN ORDER TO LEND MONEY . FOR LENDING MONEY, IT IS NOT NECESSARY THAT IT SHOULD ONLY BE OUT OF EARNED PROFIT, IT CAN BE OUT OF ITS OWN RESERVES EITHER ACCUMULATED OR CAPITAL RESERVES AVAILABLE IN THE BUSINESS. THE ASSESSING OFFICER FOLLOWED THE CASE LAW AND OTHER THEORIES RELATING TO SHELL COMPANY AND TRANSACTIONS IN THE NATURE OF INTRODUCTION OF SHARE CAPITAL AND SHARE PREMIUM IN ORDER TO INVOKE PROVISIONS OF SECTION 68 OF THE ACT. THE NATURE OF TRANSACTION, WE ARE DEALING WITH IS DIFFERENT TO THE TRANSACTION OF ISSUE OF SHARE CAPITAL. HERE, ASSESSEE HAS TAKEN UNSECURED LOAN FOR ITS BUSINESS PURPOSE AND PAID THE RELEVANT INTEREST. 35 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., THE CRITERIA TO INVOKE PROVISIONS OF SECTION 68 FOR UNSECURED LO AN TRANSACTION IS SLIGHTLY DIFFERENT COMPARED TO ISSUE OF SHARE CAPITAL. IN THE PRESENT CASE, THERE IS NO DISPUTE AS FAR AS IDENTITY IS CONCERNED SINCE ALL THE PARTIES WERE TRACEABLE , IT IS ONLY CREDIT WORTHINESS AND GENUINENESS HAS TO BE VERIFIED . 17. WITH RE GARD TO CREDIT WORTHINESS, IT IS FACT ON RECORD THAT ALL THESE COMPANIES ARE HAVING HUGE RESERVES AND BANK BALANCES TO MAKE UNSECURED LOANS TO ASSESSEE. AS LONG AS THEY DEMONSTRATE THAT THEY HAVE MEANS AND RESOURCES TO MAKE UNSECURED LOANS, THEY FULFIL THE CRITERIA OF CREDITWORTHINESS AS PER SECTION 68 OF THE ACT. IMPORTANTLY, AO DOES NOT DISPUTE THE FACT THAT THE FUNDS WERE RECEIVED FROM THESE COMPANIES AND ASSESSEE HAS PAID THE DUE INTEREST TO THE RESPECTIVE PARTIES DURING THIS ASSESSMENT YEAR OR PAID INT EREST BEFORE REPAYING THE LOAN. THEREFORE, IN OUR CONSIDERED VIEW THESE PARTIES HAVE PROVED THE CREDITWORTHINESS IN THE PRESENT CASE. 18. WE NOTICED THAT ASSESSING OFFICER ALSO REJECTED THE DETAILS OF PAN SUBMITTED BEFORE HIM WITH THE REASON THAT PAN NUMBERS A RE ALLOTTED ON THE BASIS OF APPLICATION WITHOUT ACTUAL VERIFICATION OF THE IDENTITY OR ASCERTAINING ACTIVE NATURE OF BUSINESS ACTIVITY, MOREOVER PAN IS A NUMBER WHICH IS ALLOTTED AND HELP THE REVENUE TO KEEP THE TRACK OF THE FINANCIAL 36 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., TRANSACTIONS. WE FIND IT ABSURD THAT AO IS COMPLETELY REJECTING THE RELEVANCE OF PAN AND ITS UTILISATION. IF THE PAN IS SO IRRELEVANT, HOW THE REVENUE IS COMPLETING THE ASSESSMENT AND TRACING THE TAX DUES AND THEIR COLLECTION FROM THE ASSESSEE INCLUDING THE ABOVE MENTIONED PAR TIES. FURTHER WE NOTICE THAT AO DISREGARDING THE IMPORTANCE OF MCA AND EXISTENCE OF ROC. THE EXISTENCE OF THE COMPANY UNDER THE COMPANIES ACT 1956 DEPENDS UPON THE COMPLIANCE UNDER THE COMPANIES ACT 1956 BY COMPLYING WITH THE REQUIRED STATUTORY FORMALITIES . AS LONG AS THE COMPANIES ARE IN EXISTENCE UNDER THE COMPANIES ACT, AO CANNOT TREAT THE COMPANIES AS DUMMY OR DEAD OR NO LONGER RELEVANT. 19. WE NOTICED FROM THE RECORD SUBMITTED BEFORE US THAT THE ASSESSEE HAS SUBMITTED ALL THE RELEVANT INFORMATION REQUIRED TO SUBSTANTIATE THAT THE TRANSACTIONS ARE GENUINE. THE ASSESSEE HAS RECEIVED THE FUNDS THROUGH BANKING CHANNEL AND RECORDED THE SAME IN ITS BOOKS OF ACCOUNT AND FILED RELEVANT INFORMATION IN ORDER TO PROVE THE IDENTITY BY FILING PAN AND ADDRESS OF THE PART IES, IN FEW CASES THE PARTIES HAVE MOVED THEIR PLACE OF WORK AND UPON ENQUIRY ASSESSEE WAS ABLE TO BRING ON RECORD THE PRESENT ADDRESS. IT IS ALSO FACTS ON RECORD THAT THE PARTIES ARE IN EXISTENCE AS PER THE ROC RECORDS AND THEY ARE TRACEABLE WITH THE FACT THAT THEYVE FILED THE PAN DETAIL AND LETTER OF CONFIRMATION. AS DISCUSSED ABOVE, AS LONG AS THE ASSESSEE SUBMITS THE PAN AND OTHER DETAILS TO TRACE THE PARTIES FROM 37 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., WHOM ASSESSEE HAS TAKEN UNSECURED LOANS AND AS PER THE FINANCIAL RECORDS, ALL THE PARTIES ARE IN A POSITION TO LEND MONEY TO THE ASSESSEE AND THE TRANSACTIONS ARE ROUTED THRU BANKING CHANNEL AND THERE ARE NO FINDINGS ON RECORD OF THE REVENUE THAT THERE IS NO INVOLVEMENT OF CASH DEPOSITS IN THE IMMEDIATE PAST TO THE UNSECURED LOAN TRANSACTION. FURTHER, THERE IS NO DISPUTE WITH REGARD T O UTILIZ ATION OF FUNDS IN THE BUSINESS AND APPLIED FOR THE BUSINESS PURPOSE. AS LONG AS IT IS UTILIZED IN THE BUSINESS AND THE ASSESSEE HAS DEMONSTRATED THAT IT HAS REPAID THE SAME ALONG WITH THE RELEVANT INTEREST, IT DOES DEMONSTRATE THAT THE PRESENT TRANSACTION MADE BY THE ASSESSEE IS PROPER AND FOR THE PURPOSE OF BUSINESS, THEREFORE THE TRANSACTION CAN ONLY BE TREATED AS GENUINE BUSINESS TRANSACTION. 20. IN OUR CONSIDERED VIEW, THE GENUINENESS HAS TO BE SEEN IN TWO ASPECTS, ONE, WHETHER IT IS SOURCED FROM THE CONCERNS, WHO CAN BE TRACED AND SECOND, WHETHER IT IS SOURCED FOR THE BUSINESS REQUIREMENT AND UTILIZED FOR THE PURPOSE OF BUSINESS. IN THE GIVEN CASE, THE PARTIES CAN BE TRACED AND IT IS UTILIZED FOR THE PURPOS E OF BUSINESS. THEREFORE IN OUR VIEW, ALL THE CRITERIA MENTIONED IN THE PR OVISIONS OF SECTION 68 OF THE ACT WERE FULFILLED BY THE ASSESSEE AND WE DO NOT AGREE WITH THE TAX AUTHORITIES WHO ASSESSED THE INCOME OF THE ASSESSEE WITH THE PRESUMPTION AND ASSUMPTION , THEY ALSO APPLIED CRITERIA FOR ASSESSING THE INTRODUCTION OF SHARE CAPITAL AND PREMIUM WITH THE UNSECURED LOAN TAKEN BY THE 38 ITA. NO .3171/MUM/2018 (A .Y: 2014 - 15 ) M/S. NISA INDUSTRIAL SERVICES PVT. LTD., ASSESSEE , FURTHER APPLYING THE CONCEPT OF HUMAN PROBABILITIES IN THE P RESENT TRANSACTION IS FAR - FETCHED AND IT DEMONSTRATE THAT THEY RELY ON PRESUM P TIONS . 21. ACCORDINGLY , WE ALLOW THE GROUNDS RAISED BY THE ASSESSEE RELATING TO ADDITION U/S 68 OF THE ACT AND ALLOW THE GROUND ON INTEREST EXPENDITURE RELATING TO UNSECURED LOAN TRANSACTIONS . 22. IN THE NET RESULT, APP EAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 24 . 11 .2020 AS PER RULE 34(4) OF ITAT RULES BY PLACING THE PRONOUNCEMENT LIST IN THE NOTICE BOARD. SD/ - SD/ - ( C.N. PRASAD ) ( S. RIFAUR RAHMAN ) JUDICIAL MEMBER ACCOUNTANTMEMBER MUMBAI / DATED 24 / 11/2020 GIRIDHAR, SR.PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER, (ASSTT. REGISTRAR) ITAT, MUM