SHRI SANJAY SHANTILAL JAIN, MUMBAI V. JCIT, CENTRAL RANGE-8 (3), MUMBAI

ITA 6121/MUM/2018

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 8188 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: G
• Assessment Year: 2008-2009
• Appeal Filed On: 25-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Loose papers; Accommodation entries; Bogus loan
• Section: 68; 148; 132; 271(1)(c); 143(3); 153A; 143(1); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP SINGH KARHAIL (JUDICIAL MEMBER) ITA No. 6121/MUM/2018 Assessment Year: 2008-09 & ITA No. 6122/MUM/2018 Assessment Year: 2009-10 Shri Sanjay Shantilal Jain, 72-7, Kalpatatru Residency Tower B, Sion Koliwada Road, Sion, Mumbai-400022. Vs. DCIT Central Circle-8(3), 6 th floor, Aayakar Bhavan, M.K. Road, Mumbai-400020. PAN No. AABPJ 3761 A Appellant Respondent Assessee by : Mr. Rushabh Mehta, AR Revenue by : Mr. Manoj Kumar, CIT-DR Date of Hearing : 27/07/2022 Date of pronouncement : 12/08/2022 ORDER PER OM PRAKASH KANT, AM These two appeals by the assessee are directed against two separate orders both dated 21/08/2018, passed by the Ld. Commissioner of Income-tax (Appeals)-50, Mumbai [in short ‘the Ld. CIT(A)’] for assessment year 2008 As common grounds have been raised in these appeals, therefore same were heard together and disposed off by way of this consolidated order for convenience. ITA No. 6121/MUM/2018 Assessment Year: 2008 2. Firstly, we take up the appeal for assessmen The grounds of the appeal are reproduced as under: 1. On facts and circumstances of the case, the Ld. CIT(A) Mumbai erred in not holding that the order passed u/s. 143(3) r.w.s. 153A by the DCIT, CC Officer) is without jurisdictio 2. The Ld. CIT(A) erred in facts and law in upholding the addition of loan amounting to Rs. 60,00,000/ as accommodation entry. 3. 3. The Ld. CIT(A) erred in facts and law in upholding the addition of interest amounting above accommodation loan. 4. Without prejudice to 3 above, the Ld. CIT(A) erred in facts and law in not allowing interest expense of Rs. 1.24.600/ per the loose papers. ITA Nos. 6121 & 6122/M/2018 for assessment year 2008-09 and 2009- grounds have been raised in these appeals, therefore same were heard together and disposed off by way of this consolidated order for convenience. ITA No. 6121/MUM/2018 2008-09 we take up the appeal for assessment year 2008 The grounds of the appeal are reproduced as under: On facts and circumstances of the case, the Ld. CIT(A) Mumbai erred in not holding that the order passed u/s. 143(3) r.w.s. 153A by the DCIT, CC-8(3), Mumbai ("Assessing Officer) is without jurisdiction, invalid and bad in law. The Ld. CIT(A) erred in facts and law in upholding the addition of loan amounting to Rs. 60,00,000/- by treating it as accommodation entry. 3. The Ld. CIT(A) erred in facts and law in upholding the addition of interest amounting to Rs. 4,25.343/ above accommodation loan. Without prejudice to 3 above, the Ld. CIT(A) erred in facts and law in not allowing interest expense of Rs. 1.24.600/ per the loose papers. Shri Sanjay Shantilal Jain ITA Nos. 6121 & 6122/M/2018 2 -10 respectively. grounds have been raised in these appeals, therefore same were heard together and disposed off by way of this t year 2008-09. On facts and circumstances of the case, the Ld. CIT(A)-50, Mumbai erred in not holding that the order passed u/s. 8(3), Mumbai ("Assessing n, invalid and bad in law. The Ld. CIT(A) erred in facts and law in upholding the by treating it 3. The Ld. CIT(A) erred in facts and law in upholding the to Rs. 4,25.343/- on the Without prejudice to 3 above, the Ld. CIT(A) erred in facts and law in not allowing interest expense of Rs. 1.24.600/- as 5. The Ld. CIT(A) erred in facts and law in upholding the addition of interest income of Rs. 1,21,423/ details. 6. The Ld. CIT(A) erred in facts and law in upholding the addition of labour charges of Rs. 3,00,660/ details. 6. The Ld. CIT(A) erred in facts and law in upholding the addition of l unexplained cash credit u/s. 68 of the Act. 7. All the above grounds are independent and without prejudice to each other. 3. Briefly stated facts of the case are that assessee filed regular return of income on 30/09/2008 ₹12,37,430/- which was processed under section 143(1) of the Income-tax Act, 1961 (in short and seizure action under section 132 of the 11/06/2013 on the premises of the assessee along with cases of “RSBL” group. Consequent to search action, notice under section 153A of the Act was issued asking the assessee to file return of income. In response 07/10/2014 declaring income of ITA Nos. 6121 & 6122/M/2018 The Ld. CIT(A) erred in facts and law in upholding the ion of interest income of Rs. 1,21,423/- based on ITS details. 6. The Ld. CIT(A) erred in facts and law in upholding the addition of labour charges of Rs. 3,00,660/- based on ITS details. The Ld. CIT(A) erred in facts and law in upholding the addition of loan aggregating to Rs. 32,50,000/ unexplained cash credit u/s. 68 of the Act. All the above grounds are independent and without prejudice to each other. stated facts of the case are that assessee filed regular return of income on 30/09/2008 declaring total income of which was processed under section 143(1) of the , 1961 (in short ‘the Act’). Subsequently, the search and seizure action under section 132 of the Act was carried out on 11/06/2013 on the premises of the assessee along with cases of “RSBL” group. Consequent to search action, notice under section was issued asking the assessee to file return of income. In response, the assessee filed return of income on 07/10/2014 declaring income of ₹12,37,430/- which was declared Shri Sanjay Shantilal Jain ITA Nos. 6121 & 6122/M/2018 3 The Ld. CIT(A) erred in facts and law in upholding the based on ITS details. 6. The Ld. CIT(A) erred in facts and law in upholding based on ITS The Ld. CIT(A) erred in facts and law in upholding the oan aggregating to Rs. 32,50,000/- as All the above grounds are independent and without stated facts of the case are that assessee filed regular declaring total income of which was processed under section 143(1) of the . Subsequently, the search was carried out on 11/06/2013 on the premises of the assessee along with cases of “RSBL” group. Consequent to search action, notice under section was issued asking the assessee to file return of n of income on which was declared in the regular return of income. The assessment completed under section 153A on 31/03/2016 made various additions and assessed total income at further appeal, the Ld. CIT(A) rejected the grounds of the assessee and dismissed the appeal. Aggrieved the assessee is before the Tribunal by way of raising grounds as reproduced above. 4. Before us the Ld. counsel containing pages 1 to 51. 5. The Ld. counsel the appeal being general in nature. He also did not press the ground No. 2 to 4 of the appeal. Accordingly, ground No. 1 to 4 of the appeal are dismissed as infructuous. 5.1 Regarding ground No. 5 to 7 the additions made are not based on any incriminating material found or seized during the course of the search. He submitted that in view ITA Nos. 6121 & 6122/M/2018 in the regular return of income. The Assessing Officer assessment completed under section 153A on 31/03/2016 made various additions and assessed total income at ₹1,13,34, further appeal, the Ld. CIT(A) rejected the grounds of the assessee and dismissed the appeal. Aggrieved the assessee is before the by way of raising grounds as reproduced above. Ld. counsel of the assessee filed containing pages 1 to 51. Ld. counsel of the assessee did not press ground the appeal being general in nature. He also did not press the ground No. 2 to 4 of the appeal. Accordingly, ground No. 1 to 4 of the appeal as infructuous. Regarding ground No. 5 to 7 the Ld. counsel additions made are not based on any incriminating material found or seized during the course of the search. He submitted that in view Shri Sanjay Shantilal Jain ITA Nos. 6121 & 6122/M/2018 4 Assessing Officer in the assessment completed under section 153A on 31/03/2016 made 1,13,34,860/-. On further appeal, the Ld. CIT(A) rejected the grounds of the assessee and dismissed the appeal. Aggrieved the assessee is before the by way of raising grounds as reproduced above. of the assessee filed a paperbook of the assessee did not press ground No. 1 of the appeal being general in nature. He also did not press the ground No. 2 to 4 of the appeal. Accordingly, ground No. 1 to 4 of the appeal submitted that additions made are not based on any incriminating material found or seized during the course of the search. He submitted that in view of the decision of the Hon’ble Delhi High C Kabul Chawala (2016) 380 ITR 573 (Delhi), proceedings are pending as on the date of the search than no addition can be made without basis of incriminating material. Ld. counsel submitted that time limit for i section 143(2) of the search and even no notice under section 148 of the before initiation of the search return of income of the assess finality. Hence, no assessment o the date of the initiation of conditions of the decision of the Hon’ble of Kabul Chawala (sup be made without link course of the search. He also relied on the decision of the Hon’ble Delhi High Court in the case of ITA Nos. 6121 & 6122/M/2018 of the decision of the Hon’ble Delhi High Court in the case of (2016) 380 ITR 573 (Delhi), if no assessment proceedings are pending as on the date of the search than no addition can be made without basis of incriminating material. itted that time limit for issuing section 143(2) of the Act had already expired prior to the date of the search and even no notice under section 148 of the before initiation of the search, therefore, it can be concluded that return of income of the assessee have been accepted and attained no assessment or reassessment was pending as on the date of the initiation of search. According to him both the conditions of the decision of the Hon’ble Delhi High Court in the case (supra) stands fulfilled and thus no addition can be made without link of any incriminating material found during the course of the search. He also relied on the decision of the Hon’ble Delhi High Court in the case of PCIT Vs Kurele paper Mills Private Shri Sanjay Shantilal Jain ITA Nos. 6121 & 6122/M/2018 5 ourt in the case of CIT v. f no assessment proceedings are pending as on the date of the search than no addition can be made without basis of incriminating material. The ssuing notice under had already expired prior to the date of the search and even no notice under section 148 of the Act was issued it can be concluded that ee have been accepted and attained reassessment was pending as on . According to him both the Delhi High Court in the case stands fulfilled and thus no addition can incriminating material found during the course of the search. He also relied on the decision of the Hon’ble PCIT Vs Kurele paper Mills Private Limited 380 ITR 571 (Delhi) Revenue against the said decision has been dismissed by the Hon’ble Supreme Court on 07/12/2015 6. The Ld. DR on the other authorities. 7. We have heard rival dispute and perused the relevant material on record. In respect of the ground No. 5 to 7 of the appeal, the objection of the assessee are that no assessment proceedings were pending in respect of the assessment year under consideration as on the date of the search and also addition has been made without any reference to incriminating material. We find that fact of non-pendency of any assessment the assessment order ITA Nos. 6121 & 6122/M/2018 380 ITR 571 (Delhi) and submitted that SLP filed against the said decision has been dismissed by the Hon’ble Supreme Court on 07/12/2015. DR on the other hand relied on the order of the We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. In respect of the ground No. 5 to 7 of the appeal, the objection of the assessee are that no assessment proceedings were pending in respect of the r under consideration as on the date of the search and also addition has been made without any reference to incriminating material. We find that Revenue has not challenged pendency of any assessment on the date of search t order, we find that addition in dispute Shri Sanjay Shantilal Jain ITA Nos. 6121 & 6122/M/2018 6 and submitted that SLP filed by the against the said decision has been dismissed by the Hon’ble relied on the order of the lower submission of the parties on the issue in dispute and perused the relevant material on record. In respect of the ground No. 5 to 7 of the appeal, the objection of the assessee are that no assessment proceedings were pending in respect of the r under consideration as on the date of the search and also addition has been made without any reference to has not challenged the on the date of search. From we find that addition in dispute in ground No. 5 and 6 have been made on the basis of ITS details. The relevant finding of the Ld. Assessing Officer “5. As per ITS, the assessee had received interest of Rs. 1,21,423/ on FDs which is not offered in the return of income. The assessee submitted that he is unable to trace the documents. Hence, an amount of Rs. 1,21,423/ proceeding is initiated u/s. 271(1)(c) of the Income Tax Ac furnishing inaccurate particulars of income. 6. As per ITS, the assessee received labour charges of Rs. 3,00,660/ which is not offered in the return of income. When confronted, the assessee submitted that he did not receive the payment. The as is following mercantile system of accounting and hence the amount should have been offered on accrual basis. Hence, amount of Rs. 3,00,660/- is added to the total income of the assessee. Penalty proceeding is initiated u/s. 271(1)(c) of the Income T furnishing inaccurate particulars of income. 7.1 Regarding the ground No. has not referred to any incriminating material but the Ld. CIT(A) has made general observation obtaining accommodation entries. The relevant para of the Ld. CIT(A) is reproduced as under: ITA Nos. 6121 & 6122/M/2018 have been made on the basis of ITS details. The relevant Assessing Officer are reproduced as under: As per ITS, the assessee had received interest of Rs. 1,21,423/ FDs which is not offered in the return of income. The assessee submitted that he is unable to trace the documents. Hence, an amount of Rs. 1,21,423/- is added to the total of the assessee. Penalty proceeding is initiated u/s. 271(1)(c) of the Income Tax Ac furnishing inaccurate particulars of income. 6. As per ITS, the assessee received labour charges of Rs. 3,00,660/ which is not offered in the return of income. When confronted, the assessee submitted that he did not receive the payment. The as is following mercantile system of accounting and hence the amount should have been offered on accrual basis. Hence, amount of Rs. is added to the total income of the assessee. Penalty proceeding is initiated u/s. 271(1)(c) of the Income Tax Act, 1961 for furnishing inaccurate particulars of income.” the ground No. 7 also though the Assessing Officer to any incriminating material but the Ld. CIT(A) has made general observation that the assessee was obtaining accommodation entries. The relevant para of the Ld. CIT(A) is reproduced as under: Shri Sanjay Shantilal Jain ITA Nos. 6121 & 6122/M/2018 7 have been made on the basis of ITS details. The relevant are reproduced as under: As per ITS, the assessee had received interest of Rs. 1,21,423/- FDs which is not offered in the return of income. The assessee submitted that he is unable to trace the documents. Hence, an is added to the total of the assessee. Penalty proceeding is initiated u/s. 271(1)(c) of the Income Tax Act, 1961 for 6. As per ITS, the assessee received labour charges of Rs. 3,00,660/- which is not offered in the return of income. When confronted, the assessee submitted that he did not receive the payment. The assessee is following mercantile system of accounting and hence the amount should have been offered on accrual basis. Hence, amount of Rs. is added to the total income of the assessee. Penalty ax Act, 1961 for Assessing Officer to any incriminating material but the Ld. CIT(A) has was engaged in obtaining accommodation entries. The relevant para of the Ld. “18.4 I have taken note of the fact that there is substantial adverse & incriminating material on record to prove that the appellant has indulged in taking & givin Further, even accommodation entries of loans have been taken by the Appellant from the bogus concerns of Gautam Bhanwarlal Jain Group. During the course of the search and survey operation on the Appellant, substantial i relating to accommodation entries taken by the Appellant, which has already been discussed in great details in the earlier part of the appellate order. The same is not repeated here for the sake of brevity, but it is relied upon to prove that there is incriminating material on record to hold that the appellant has taken accommodation entries by paying entry charges.” 7.2 We find that there is no specific reference of material for sustaining the additio which was made by the Act. 7.3 In view of above, Hon’ble Delhi High Court (supra) that for making addition under section 153A of the firstly, the assessment proceedings should be pending as of the date ITA Nos. 6121 & 6122/M/2018 18.4 I have taken note of the fact that there is substantial adverse & incriminating material on record to prove that the appellant has indulged in taking & giving cash unaccounted loans / advances. Further, even accommodation entries of loans have been taken by the Appellant from the bogus concerns of Gautam Bhanwarlal Jain Group. During the course of the search and survey operation on the Appellant, substantial incriminating material has been found, relating to accommodation entries taken by the Appellant, which has already been discussed in great details in the earlier part of the appellate order. The same is not repeated here for the sake of brevity, elied upon to prove that there is incriminating material on record to hold that the appellant has taken accommodation entries by paying entry charges.” find that there is no specific reference of any material for sustaining the addition in dispute of which was made by the Assessing Officer under section 68 of the In view of above, both the conditions of the decision of the High Court (supra) in the case of Kabul Chawal (supra) that for making addition under section 153A of the firstly, the assessment proceedings should be pending as of the date Shri Sanjay Shantilal Jain ITA Nos. 6121 & 6122/M/2018 8 18.4 I have taken note of the fact that there is substantial adverse & incriminating material on record to prove that the appellant has g cash unaccounted loans / advances. Further, even accommodation entries of loans have been taken by the Appellant from the bogus concerns of Gautam Bhanwarlal Jain Group. During the course of the search and survey operation on the ncriminating material has been found, relating to accommodation entries taken by the Appellant, which has already been discussed in great details in the earlier part of the appellate order. The same is not repeated here for the sake of brevity, elied upon to prove that there is incriminating material on record to hold that the appellant has taken accommodation entries any incriminating n in dispute of ₹32,50,000/- under section 68 of the the decision of the in the case of Kabul Chawal (supra) that for making addition under section 153A of the Act, firstly, the assessment proceedings should be pending as of the date of the search and secondly, there should be incriminating material for making the addition, are not justified in sustaining the additions challenged by the assessee in ground No. 5 to 7 of the appeal. The grounds of the appeal of the assessee are accordingly allowed. ITA No. 6122/MUM/2018 Assessment Year: 2009 8. The grounds raised by the assessee in assessment year 2009 10 are reproduced as under: “1. (a) On facts and circumstances of the case, the Ld. CIT(A) Mumbai erred in not holding that the order passed u/s. 143(3) r.w.s. 153A by the DCIT, CC jurisdiction, invalid and bad in law. (b) The Ld. CIT(A) appreciating the explanations and material placed on record as well as true content of the seized material and taking the wholistic view of the matter by telescoping the real income of the assessee. 2. The Ld. CIT( interest amounting to Rs. 5,19,530/ A.Y. 2008-09. ITA Nos. 6121 & 6122/M/2018 of the search and secondly, there should be incriminating material for making the addition, are not fulfilled. Therefore, the Ld. CIT(A) is not justified in sustaining the additions challenged by the assessee in ground No. 5 to 7 of the appeal. The grounds of the appeal of the assessee are accordingly allowed. ITA No. 6122/MUM/2018 2009-10 The grounds raised by the assessee in assessment year 2009 10 are reproduced as under: (a) On facts and circumstances of the case, the Ld. CIT(A) Mumbai erred in not holding that the order passed u/s. 143(3) r.w.s. 153A by the DCIT, CC-8(3), Mumbai ("Assessing Officer) is without jurisdiction, invalid and bad in law. (b) The Ld. CIT(A) has grossly erred in facts and law in not appreciating the explanations and material placed on record as well as true content of the seized material and taking the wholistic view of the matter by telescoping the real income of the assessee. 2. The Ld. CIT(A) erred in facts and law in upholding the addition of interest amounting to Rs. 5,19,530/- on alleged bogus loan taken in Shri Sanjay Shantilal Jain ITA Nos. 6121 & 6122/M/2018 9 of the search and secondly, there should be incriminating material not fulfilled. Therefore, the Ld. CIT(A) is not justified in sustaining the additions challenged by the assessee in ground No. 5 to 7 of the appeal. The grounds of the appeal of the The grounds raised by the assessee in assessment year 2009- (a) On facts and circumstances of the case, the Ld. CIT(A)-50, Mumbai erred in not holding that the order passed u/s. 143(3) r.w.s. 8(3), Mumbai ("Assessing Officer) is without has grossly erred in facts and law in not appreciating the explanations and material placed on record as well as true content of the seized material and taking the wholistic view of A) erred in facts and law in upholding the addition of on alleged bogus loan taken in 3. (a) The Ld. CIT(A) erred in facts and law in upholding the addition of loan aggregating to Rs. 38,75,000/ 68 of the Act. (b) The Ld. CIT(A) erred in facts and law in not appreciating that the addition of Rs. 38,75,000/ of any incriminating material found in the course of search once the assessment had already attained finality prior to the date of search (c) The Id. CIT(A) has even erroneously mentioned the fact in para 17.2 of his order that no assessment order u/s. 143(3) is passed prior to search. 4. All the above grounds are independent and w each other.” 9. At the outset assessee is not pressing ground No. therefore both these grounds are dismissed as infructuous. 10. In respect of the ground No. ₹38,75,000/- of unexplained cash credit terms of section 68 of the Act has been challenged by the assessee. that no assessment was pending as of the date of the search addition has been made without reference to any incriminating ITA Nos. 6121 & 6122/M/2018 3. (a) The Ld. CIT(A) erred in facts and law in upholding the addition of loan aggregating to Rs. 38,75,000/- as unexplained cash credit (b) The Ld. CIT(A) erred in facts and law in not appreciating that the addition of Rs. 38,75,000/- cannot be made u/s. 68 of the Act devoid of any incriminating material found in the course of search once the nt had already attained finality prior to the date of search (c) The Id. CIT(A) has even erroneously mentioned the fact in para 17.2 of his order that no assessment order u/s. 143(3) is passed prior 4. All the above grounds are independent and without prejudice to the outset Ld. counsel of the assessee submitted that assessee is not pressing ground No. 1 and 2 of the appeal and therefore both these grounds are dismissed as infructuous. In respect of the ground No. 3, wherein the addition made of of unexplained cash credit terms of section 68 of the been challenged by the assessee. The Ld. counsel was pending as of the date of the search addition has been made without reference to any incriminating Shri Sanjay Shantilal Jain ITA Nos. 6121 & 6122/M/2018 10 3. (a) The Ld. CIT(A) erred in facts and law in upholding the addition ained cash credit u/s. (b) The Ld. CIT(A) erred in facts and law in not appreciating that the cannot be made u/s. 68 of the Act devoid of any incriminating material found in the course of search once the nt had already attained finality prior to the date of search (c) The Id. CIT(A) has even erroneously mentioned the fact in para 17.2 of his order that no assessment order u/s. 143(3) is passed prior ithout prejudice to of the assessee submitted that of the appeal and therefore both these grounds are dismissed as infructuous. n the addition made of of unexplained cash credit terms of section 68 of the Ld. counsel submitted was pending as of the date of the search and addition has been made without reference to any incriminating material therefore following the decision of the Hon’ble Delhi High Court in the case of Kabul Chawala deleted. The Ld. DR on the other hand relied on the order lower authorities. 11. We find that assessment under section 143(3) of the year under consideration was completed by the 15/12/2011. This fact has been mentioned by the in para 5 of the impugned a pendency of the assessment as on date of the search. The addition under section 68 of Officer observing as under: “6. The assessee has claimed following loans taken during the year under consideration other than those from family members or close relatives: Sr. No. 1. 2. 3. 4. 5. ITA Nos. 6121 & 6122/M/2018 material therefore following the decision of the Hon’ble Delhi High Court in the case of Kabul Chawala (supra), the additio DR on the other hand relied on the order We find that assessment under section 143(3) of the year under consideration was completed by the Assessing Officer 15/12/2011. This fact has been mentioned by the Assessing Officer of the impugned assessment order. Thus there was no pendency of the assessment as on date of the search. The addition under section 68 of ₹38,75,000/- has been made by the observing as under: The assessee has claimed following loans taken during the ear under consideration other than those from family members or close relatives: Name of the Party Amount (₹) Rajesh Jain 1,00,000/ Swami Samarth Medical 35,00,000/ Chandadevi Ranmal 1,00,000/ Sukhidevi Ranmal 1,00,000/ Riti D. Jain 75,000/ Shri Sanjay Shantilal Jain ITA Nos. 6121 & 6122/M/2018 11 material therefore following the decision of the Hon’ble Delhi High addition need to be DR on the other hand relied on the orders of the We find that assessment under section 143(3) of the Act for the Assessing Officer on Assessing Officer ssessment order. Thus there was no pendency of the assessment as on date of the search. The addition has been made by the Assessing The assessee has claimed following loans taken during the ear under consideration other than those from family members or ₹) 1,00,000/- 35,00,000/- 1,00,000/- 1,00,000/- 75,000/- 6.1 The assessee has furnished only confirmation of the party and no supporting documents as regards genuineness of loans are furnished As discussed above, the details were furnished on 29.03.2016 and it was not possible as liability in the balance she of the assessee and the onus is on the assessee to explain cash credit appearing in his books of accounts as per the provisions of section 68 of the Income Tax Act 1 at is to establish identity of the party, genuineness of transaction and creditworthiness of the party. The assessee failed to offer any explanation at all on this liability as appearing in his balance sheet. Mere filing of confirmation is not sufficient in view o Hon'ble Supreme Court in the case of Durgaprasad More 82 ITR 510. The Hon'ble Kerala High Court in the case of M/s. Diza Holdings Pvt. td 120 Taxmann 539 has held as under: On the terms of section 68, the burden is on the assessee to offer a satisfactory explanation about the nature and source of the amount found credited in the books of the assessee. It is also clear at the furnishing of particulars is not enough. The mere fact that payment is by way of account payee cheque also not conc Assessing Officer was entitled to consider whether notwithstanding the fact that the payments were not made by cheques, whether the assessee had satisfactorily explained the nature and sour e of the amounts found credited in the book Officer was satisfied that the so resources to make such deposits ITA Nos. 6121 & 6122/M/2018 Total 38,75,000/ 6.1 The assessee has furnished only confirmation of the party and no supporting documents as regards genuineness of loans are furnished As discussed above, the details were furnished on 29.03.2016 and it was not possible to make any verification. The amount is appearing as liability in the balance she of the assessee and the onus is on the assessee to explain cash credit appearing in his books of accounts as per the provisions of section 68 of the Income Tax Act 1 at is to establish identity of the party, genuineness of transaction and creditworthiness of the party. The assessee failed to offer any explanation at all on this liability as appearing in his balance sheet. Mere filing of confirmation is not sufficient in view of decision of Hon'ble Supreme Court in the case of Durgaprasad More 82 ITR 510. The Hon'ble Kerala High Court in the case of M/s. Diza Holdings Pvt. td 120 Taxmann 539 has held as under: On the terms of section 68, the burden is on the assessee to offer a explanation about the nature and source of the amount found credited in the books of the assessee. It is also clear at the of particulars is not enough. The mere fact that payment is by way of account payee cheque also not conclusive. Therefore, the Assessing Officer was entitled to consider whether notwithstanding the payments were not made by cheques, whether the assessee had satisfactorily explained the nature and sour e of the amounts found credited in the books of the assessee. The Assessing Officer was satisfied that the so- alled depositors did not have that resources to make such deposits. Shri Sanjay Shantilal Jain ITA Nos. 6121 & 6122/M/2018 12 38,75,000/- 6.1 The assessee has furnished only confirmation of the party and no supporting documents as regards genuineness of loans are furnished As discussed above, the details were furnished on 29.03.2016 and it to make any verification. The amount is appearing as liability in the balance she of the assessee and the onus is on the assessee to explain cash credit appearing in his books of accounts as per the provisions of section 68 of the Income Tax Act 1 at is to establish identity of the party, genuineness of transaction and creditworthiness of the party. The assessee failed to offer any explanation at all on this liability as appearing in his balance sheet. f decision of Hon'ble Supreme Court in the case of Durgaprasad More 82 ITR 510. The Hon'ble Kerala High Court in the case of M/s. Diza Holdings Pvt. On the terms of section 68, the burden is on the assessee to offer a explanation about the nature and source of the amount found credited in the books of the assessee. It is also clear at the mere of particulars is not enough. The mere fact that payment is lusive. Therefore, the Assessing Officer was entitled to consider whether notwithstanding the payments were not made by cheques, whether the assessee had satisfactorily explained the nature and sour e of the s of the assessee. The Assessing alled depositors did not have that 6.2 Hence, the onus lies on the assessee to establish th cash credit appearing in his books of accounts which the assess lain. Hence, addition of Rs.38,75,000/ the assessee u/s.68 Tax Act. Penalty proceed u/s.271(1)(c)c the Income Tax Act for particulars of income. 7. In view of the above computed Income as per return of income Add: Interest on bogus loans as discussed above. Add: u/s 68 as discussed above. Assessed Total Income 12. On perusal of the above finding of the find that there is no reference of any incriminating material for making the addition. The Ld. CIT(A) has also not mention specific incriminating document material found during the course of the search, for sustaining the addition in dispute. Therefore, following our finding in assessment year 2008 dispute in the assessment year consideration is also d ground No. 3 of the appeal is accordingly ITA Nos. 6121 & 6122/M/2018 6.2 Hence, the onus lies on the assessee to establish th cash credit appearing in his books of accounts which the assessee failed to ex lain. Hence, addition of Rs.38,75,000/- is made to the total income of ee u/s.68 Tax Act. Penalty proceedings is initiated c the Income Tax Act for furnishing inaccurate particulars of income. 7. In view of the above discussion, total income of the assessee is Amount ( Income as per return of income 42,07,350/ Add: Interest on bogus loans as discussed above. 5,19,530/ Add: u/s 68 as discussed above. 38,75,000/ Assessed Total Income 86,01,880/ perusal of the above finding of the Assessing Officer find that there is no reference of any incriminating material for making the addition. The Ld. CIT(A) has also not mention specific incriminating document material found during the course of the search, for sustaining the addition in dispute. Therefore, following our finding in assessment year 2008-09, the addition in dispute in the assessment year consideration is also d of the appeal is accordingly allowed. Shri Sanjay Shantilal Jain ITA Nos. 6121 & 6122/M/2018 13 6.2 Hence, the onus lies on the assessee to establish th cash credit ee failed to ex o the total income of ings is initiated furnishing inaccurate discussion, total income of the assessee is Amount (₹) 42,07,350/- 5,19,530/- 38,75,000/- 86,01,880/- Assessing Officer, we find that there is no reference of any incriminating material for making the addition. The Ld. CIT(A) has also not mentioned any specific incriminating document material found during the course of the search, for sustaining the addition in dispute. Therefore, 09, the addition in dispute in the assessment year consideration is also deleted. The 13. In the result, both the appeals of the assessee are allowed partly. Order pronounced in the open Court on 12/08/2022. Sd/- (SANDEEP SINGH KARHAIL JUDICIAL MEMBER Mumbai; Dated: 12/08/2022 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// ITA Nos. 6121 & 6122/M/2018 In the result, both the appeals of the assessee are allowed Order pronounced in the open Court on 12/08/2022. Sd/ SANDEEP SINGH KARHAIL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT Copy of the Order forwarded to : BY ORDER, (Sr. Private Secretary ITAT, Mumbai Shri Sanjay Shantilal Jain ITA Nos. 6121 & 6122/M/2018 14 In the result, both the appeals of the assessee are allowed Order pronounced in the open Court on 12/08/2022. Sd/- OM PRAKASH KANT) MEMBER Sr. Private Secretary) ITAT, Mumbai