ACIT 32(1), MUMBAI V. GUJARAT ESTATE, MUMBAI

ITA 6990/MUM/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7388 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 30-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VIDHYADHAR
• Assessee Lawyers: R C MODI; KETKI RAJESHIRKE
• Keywords: Unexplained cash credit; Accommodation entries
• Section: 142(1); 133(6); 147; 68; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER & SHRI G MANJUNATHA, ACCOUNTANT MEMBER ITA NO.6990/MUM/2016 ASSESSMENT YEAR : 2007-2008 ACIT 32(1) MUMBAI VS. M/S. GUJARAT ESTATE, SHOP NO.4, RACHNA CHS, ESKAR ROAD, BORIVALI (W), MUMBAI 400 092 PAN AAFFG3632F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI V VIDHYADHAR RESPONDENT BY : SHRI R C MODI & MS KETKI RAJESHIRK E DATE OF HEARING :14.05.2018 DATE OF PRONOUNCEMENT : 18.05.2018 O R D E R PER G MANJUNATHA, ACCOUNTANT MEMBER THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST ORDER OF THE CIT(A)-44, MUMBAI, DATED 09.09.2016, AND IT PERTAINS TO ASSESS MENT YEAR 2007-08. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL :- 1) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS. 44, 13,984/- MADE ON ACCOUNT OF UNSECURED LOANS AND INTEREST AS THE ASSE SSEE HAS FILED TO PROVE THE IDENTIFY, CREDITWORTHINESS AND GENUINENES S OF THE SAID LOAN.' 2. 'ON THE FACT AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 44 ,13,984/- MADE ON ACCOUNT OF UNSECURED LOANS AND INTEREST DEPOSIT THE FACT THAT THE PARTY FROM WHOM THE ALLEGED LOAN WAS RECEIVED BY THE -ASS ESSEE WAS LISTED AS HAWALA ENTRY PROVIDER WHO INDULGED IN PROVIDING ACC OMMODATION ENTRY OF UNSECURED LOANS AND RELATED TO BHANWARLAL JAIN AND HIS GROUP.' 3. 'ON THE FACT AND IN THE CIRCUMSTANCES OF THE CA SE THE FINDING OF THE LD.CIT(A) THAT THE AO HAS ONLY DISCUSSED THE FACTS OF BHANWARLAL JAIN GROUP AND THE AO HAS NOT APPRECIATED THE FACT HE WA S NOT MAKING THE ITA NO.6990/MUM/2016 GUJARAT ESTATE. 2 ASSESSMENT OF BHANWARLAL JAIN. THIS FINDING IS PERV ERSE ON FACTS AS THE ASSESSEE HAS INTRODUCED THE ACCOMMODATION ENTRIES O F LOAN FROM THE GROUP CONCERNS CONTROLLED BY BHANWARLAL JAIN AS SUC H THE AO'S FINDING AND RELIANCE PLACED ON THE INVESTIGATION MADE BY TH E INVESTIGATION WING WAS RIGHT.' 4. 'ON THE FACT AND IN THE CIRCUMSTANCES OF THE CA SE THE FINDING OF THE LD. CIT(A) THAT THE ASSESSEE HAS PROVED IDENTIFY, C REDITWORTHINESS AND GENUINENESS OF LOAN IS PERVERSE ON FACTS AS THE ASS ESSEE HAS NOT FURNISHED ANY EVIDENCE TO JUSTIFY THE CREDITWORTHIN ESS AND GENUINENESS OF THE LOAN.' 5. 'THE APPELLANT PRAY THAT THE ORDER OF THE LD. C IT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE AO BE RESTORED. ' 6. 'THE APPELLANT CRAVES LEAVES TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE, A P ARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF BUILDERS AND DEVELOPERS, FILED ITS RETURN OF INCOME FOR A.Y. 2007-08 ON 23.10.2007, DECLARING TOTAL INCOME OF ` 52,96,840/-. THE CASE HAS BEEN RE- OPENED U/S. 147 OF THE INCOME TAX ACT, 1961, ON THE GROUND THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147. THE REASONS RECORDED FOR RE-OPENING WAS BASED ON SPECIF IC INFORMATION RECEIVED FROM DGIT (INV), MUMBAI, WHICH SUGGESTED THAT THE ASSESS EE HAS TAKEN ACCOMMODATION ENTRIES OF UNSECURED LOANS FROM BHANWARLAL JAIN GRO UP OF COMPANIES, WHICH IN TURN GATHERED DURING THE COURSE OF SEARCH OPERATION U/S. 132 IN THE CASE OF SAID GROUP. ACCORDINGLY, NOTICE U/S. 148 WAS ISSUED CALLING FOR RETURN OF INCOME. IN RESPONSE TO NOTICE U/S. 148, THE ASSESSEE FILED A LETTER DATED 08.04.2014, STATING THAT THE RETURN OF INCOME FILED ON 23.10.2007 BE TREATED AS RETURN FILED IN RESPONSE TO NOTICE U/S. 148 OF THE ACT. THE CASE HAS BEEN SELECTED FOR SCR UTINY AND NOTICES U/S. 143(2) AND 142(1) OF THE ACT WAS ISSUED. IN RESPONSE TO THE S AID NOTICES, THE LEARNED AUTHORIZED REPRESENTATIVE (AR) FOR THE ASSESSEE APP EARED FROM TIME TO TIME AND FILED NECESSARY DETAILS AS CALLED FOR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HA S TAKEN BOGUS ACCOMMODATION UNSECURED LOAN ENTRIES FROM M/S. A2 JEWELS AND JEWE L DIAM TO THE TUNE OF ` 42,47,661/-. THEREFORE, HE CALLED UPON THE ASSESS EE TO FURNISH NECESSARY ITA NO.6990/MUM/2016 GUJARAT ESTATE. 3 EVIDENCE TO PROVE IDENTITY, GENUINENESS OF TRANSACT IONS AND CREDITWORTHINESS OF THE PARTIES. IN RESPONSE TO NOTICE, THE ASSESSEE HAS F ILED NECESSARY DETAILS ALONG WITH CONFIRMATION FROM PARTIES TO PROVE THEIR IDENTITY. THE ASSESSEE ALSO FILED BANK STATEMENTS AND OTHER DETAILS TO PROVE THE GENUINENE SS OF THE TRANSACTIONS AND CREDITWORTHINESS OF THE PARTIES. IN ORDER TO VERIF Y THE GENUINENESS OF THE LENDERS, THE ASSESSING OFFICER ISSUED NOTICE U/S. 133(6) OF THE INCOME-TAX ACT 1961, AND WERE ASKED TO PRODUCE THEIR FINANCIAL STATEMENTS AL ONG WITH INCOME TAX RETURN. HOWEVER, THE PARTIES DID NOT RESPOND TO THE NOTICE ISSUED U/S. 133(6) OF THE ACT. THEREAFTER, THE ASSESSING OFFICER CALLED UPON THE A SSESSEE TO SHOW CAUSE AS TO WHY THE LOANS FROM TWO PARTIES SHOULD NOT BE TREATED AS UNEXPLAINED CASH CREDITS ESPECIALLY IN THE LIGHT OF THE INFORMATION RECEIVED FROM DGIT (INV), MUMBAI. IN RESPONSE TO SHOW CAUSE NOTICE, THE ASSESSEE, VIDE L ETTER DATED 10.03.2015, SUBMITTED THAT IT HAS LOAN TAKEN FROM M/S. A2 JEWEL S AND JEWEL DIAM AND SAID LOANS HAVE BEEN TAKEN BY CHEQUE. THE ASSESSEE FURTHER SU BMITTED THAT THE LOANS WERE REPAID IN SUBSEQUENT FINANCIAL YEAR ALONG WITH INTE REST AND ALSO DEDUCTED TDS ON INTEREST PAID ON LOANS. THEREFORE, MERELY ON THE B ASIS OF STATEMENT OF THIRD PARTY, THE LOANS TAKEN FROM ABOVE TWO PARTIES CANNOT BE CO NSIDERED AS ACCOMMODATION ENTRIES. THE ASSESSING OFFICER AFTER CONSIDERING R ELEVANT SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE ASSESSEE HAS FAILED TO P ROVE THE IDENTITY OF THE PARTIES, GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINES S OF THE LENDERS WITH NECESSARY EVIDENCES IN THE BACKDROP OF CLEAR FINDINGS FROM TH E INVESTIGATION WING, WHEREIN SHRI BHANWARLAL JAIN HAD CATEGORICALLY ADMITTED BEF ORE THE AUTHORITIES THAT HE WAS INVOLVED IN PROVIDING ACCOMMODATING ENTRIES THROUGH HIS COMPANIES OPERATED BY HIS EMPLOYEES. THE ASSESSING OFFICER FURTHER SUBMITTED THAT MERE PRODUCTION OF LEDGER ACCOUNT AND BANK STATEMENTS WOULD NOT BE SUFFICIENT COMPLIANCE OF PROVING THE IDENTITY, GENUINENESS OF TRANSACTIONS AND CREDITWOR THINESS OF THE PARTIES. THEREFORE, OPINED THAT THE ASSESSEE HAS FAILED TO PROVE THE LO ANS TAKEN FROM ABOVE TWO PARTIES AND, ACCORDINGLY, MADE ADDITIONS U/S. 68 OF THE INC OME TAX ACT 1961. 3. AGGRIEVED BY THE ASSESSMENT ORDER, ASSESSEE PREF ERRED APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A) THE ASSESSEE HAS REITERA TED THE SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER. THE ASSESSEE FURTHER SUBMIT TED THAT IT HAS FURNISHED ITA NO.6990/MUM/2016 GUJARAT ESTATE. 4 NECESSARY EVIDENCES TO PROVE LOANS TAKEN FROM M/S. A2 JEWELS AND JEWEL DIAM BY FILING LOAN CONFIRMATION LETTER FROM LENDERS, PAN O F LENDERS, COPY OF INCOME TAX RETURN, COPY OF BANK STATEMENTS AND QUARTERLY TDS F ILED WITH THE DEPARTMENT, THEREFORE, MERELY ON THE BASIS OF THIRD PARTY STATE MENT, THE ASSESSING OFFICER WAS INCORRECT IN MAKING THE ADDITIONS TOWARDS LOANS TAK EN FROM ABOVE TWO COMPANIES U/S. 68 OF THE INCOME TAX ACT, 1961. 4. THE CIT(A) AFTER CONSIDERING THE RELEVANT SUBMIS SIONS OF THE ASSESSEE AND RELIED UPON CERTAIN JUDICIAL PRECEDENTS INCLUDING T HE DECISION IN THE CASE OF ITO VS. ANANT SHELTERS PVT LTD.(2012) 20 TAXMANN.COM 153 AN D DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF M/S. RUSHABH ENTERPRISES VS. ACIT IN W.P. 167 OF 2015 DATED 15.04.2015, OBSERVED THAT THE ASSESSEE HAS FI LED NECESSARY EVIDENCES TO PROVE THE IDENTITY, GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE PARTIES, WHICH IS EVIDENT FROM THE FACT THAT THE ASSESSING O FFICER HAS NOT DISPUTED THE IDENTITY OF THE PARTIES. THE ASSESSING OFFICER MAD E ADDITIONS MERELY ON THE BASIS OF THE ADMISSION OF SHRI BHANWARLAL JAIN IN THE STATEM ENT RECORDED U/S. 132(4), HOWEVER, SUCH ADMISSION HAS BEEN RETRACTED BY SHRI BHANWARLAL JAIN. THEREFORE, THERE IS NO REASON FOR THE ASSESSING OFFICER TO MAK E ADDITIONS ONLY ON THE BASIS OF STATEMENTS OF THIRD PARTY WHEN THE ASSESSEE HAS SUB MITTED ENORMOUS DETAILS TO PROVE THE LOANS TAKEN FROM THE ABOVE TWO PARTIES. THE RELEVANT PORTION OF THE ORDER OF CIT(A) IS EXTRACTED BELOW: 4.3 I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT O RDER AS WELL AS THE WRITTEN SUBMISSION OF THE AR. I HAVE ALSO PERUSED T HE DETAILS FILED BY THE AR. THE AO HAS MADE ADDITION U/S 68 OF THE IT ACT 1 961. IT IS THEREFORE IMPORTANT TO UNDERSTAND THE POSITION OF LAW WHICH H AS EVOLVED FROM A CATENA OF JUDGMENTS DELIVERED BY HIGH COURTS AND TR IBUNALS ON THIS ISSUE. (THE HON'BLE ITAT MUMBAI IN THE CASE OF ITO VS ANAN T SHELTERS PVT. LTD. (2012) 20 TAXMANN.COM 153 HAS ENUMERATED CERTAIN PR INCIPLES WHICH WOULD BE EXTREMELY USEFUL IN UNDERSTANDING THE ISSU E IN HAND. IT HAS BEEN STATED IN THE SAID JUDGMENT THAT OVER THE YEAR S, LAW REGARDING CASH CREDITS HAVE EVOLVED AND HAS TAKEN A DEFINITE SHAPE . A FEW ASPECTS OF LAW U/S 68 CAN BE ENUMERATED 1. SEC. 68 CAN BE INVOKED WHEN THERE IS A CRE DIT OF AMOUNTS IN THE BOOKS MAINTAINED BY THE ASSESSEE, SUCH CREDI T IS A SUM OF MONEY DURING THE PREVIOUS YEAR AND EITHER THE ASSES SEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF SUCH CRE DITS OR THE ITA NO.6990/MUM/2016 GUJARAT ESTATE. 5 EXPLANATION BY THE ASSESSEE IN THE OPINION OF THE A O IS NOT SATISFACTORY. 2. THE OPINION OF THE AO FOR NOT ACCEPTING TH E EXPLANATION OFFERED BY THE ASSESSEE AS NOT SATISFACTORY IS REQU IRED TO BE FORMED OBJECTIVELY WITH REFERENCE TO THE MATERIAL O N RECORD. 3. COURTS ARE OF THE FIRM VIEW THAT THE EVIDE NCE PRODUCED BY THE ASSESSEE CANNOT BE BRUSHED ASIDE IN A CASUAL MA NNER. 4. THE ONUS OF PROOF IS NOT STATIC. THE INITIAL B URDEN LIES ON THE ASSESSEE TO ESTABLISH THE IDENTITY AND THE CREDIT W ORTHINESS OF THE CREDITOR AS WELL AS THE GENUINENESS OF TRANSACTION. 5. THE IDENTITY OF CREDITORS CAN BE ESTABLISH ED BY EITHER FURNISHING THEIR PANS OR ASSESSMENT ORDERS. THE GEN UINENESS OF THE TRANSACTION CAN BE PROVED IF IT WAS SHOWN THAT THE MONEY WAS RECEIVED BY A/C PAYEE CHEQUE. CREDITWORTHINESS OF THE LENDER CAN BE ESTABLISHED BY ATTENDING CIRCUMSTANCE S. 4.4 DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE FOLLOWING DETAILS WERE FILED BEFORE THE AO. 1. LOAN CONFIRMATION FROM THE LENDERS. 2. PAN NO. OF THE LENDERS. 3. LEDGER EXTRACT. 4. COPY OF THE RETURN OF INCOME OF THE FIRM/COMPANY WHICH ADVANCED THE LOAN. 5. COPY OF BANK ACCOUNT OF THE LENDER. 6. COPY OFBANKA/C OF THE ASSESSEE. 7. QUARTERLY RETURNS FOR T.D.S. FILED WITH THE DEPA RTMENT. 4.5 IF THE ABOVE REFERRED PRINCIPLES ARE APPLIED T O THE FACTS OF THE CASE UNDER CONSIDERATION IT CAN BE SEEN THAT THE ID ENTITY OF THE CREDITORS HAS BEEN ESTABLISHED AS THEY ARE HAVING PAN AND THE Y ARE FILING RETURN OF INCOME. 'THE GENUINENESS OF THE TRANSACTION IS ESTA BLISHED FROM THE FACT THAT BOTH THE ACCEPTANCE AND REPAYMENT OF LOAN HAS BEEN THROUGH BANKING CHANNELS. FURTHER TINE INTEREST PAID AGAINS T SUCH LOANS HAVE BEEN SUBJECT TO TDS, THE DETAILS OF WHICH HAVE BEEN FILE D BEFORE THE AO. THE CREDITWORTHINESS OF THE LENDERS CAN BE ESTABLISHED FROM THE LEDGER A/C, BANK STATEMENTS AND BALANCE SHEET OF THE LENDERS WH ICH WERE FILED BEFORE THE AO. IN THE ASSESSMENT ORDER, THE AO MENTIONED THAT MERE LY FILING COPIES OF ACCOUNT, BILLS, BANK STATEMENTS, DOES NOT ESTABLISH THAT THE 'TRANSACTIONS ARE GENUINE. THE AO ALSO STATED THAT THE ASSESSEE F AILED TO PRODUCE THE PARTIES. (FROM A CAREFUL PERUSAL OF ASSESSMENT ORDE R IT IS SEEN THAT THE ITA NO.6990/MUM/2016 GUJARAT ESTATE. 6 AO HAD ISSUED NOTICE U/S 133(6) TO THE LENDERS TO V ERIFY THE GENUINENESS OF THE LOANS. THE AO HAS NOT MENTIONED THE OUTCOME OF THE ENQUIRY MADE U/S 133(6). HOWEVER, AO HAS REPRODUCED THE REP LY OF THE ASSESSEE FILED IN RESPONSE TO THE SHOW CAUSE WHEREIN THE ASS ESSEE HAS MENTIONED THAT THE PARTIES HAVE CONFIRMED THE GENUINENESS OF LOANS IN RESPONSE TO NOTICE U/S 133(6). THE AO HAS NOT DISPUTED THIS FACT IN THE ASSESSMENT ORDER. AS FAR AS THE ISSUE OF PRODUCING THE LENDERS BEFORE THE AO IS CONCERNED, THE ASSESSEE CANNOT BE REASONABLY EXPECT ED TO FORCE THE LENDERS TO APPEAR BEFORE THE AO SPECIALLY WHEN THE LENDERS HAVE ALREADY SUBMITTED THEIR CONFIRMATION AND AFFIDAVITS. THE EN TIRE FOCUS OF THE AO WAS ON THE MODUS OPERANDI ADOPTED BY BHANWARLAL JAI N TO PROVIDE BOGUS ACCOMMODATION ENTRY OF LOAN. THE MAIN REASON FOR M AKING ADDITION U/S 68 WAS ON THE BASIS OF INFORMATION PROVIDED BY THE INVESTIGATION WING. WHILE THE INFORMATION PROVIDED BY THE INVESTIGATION WING CAN BE THE STARTING POINT OF AN ENQUIRY IT CANNOT BE A CONCLUS ION REACHED BY THE AO, THE MOOT POINT BEFORE THE AO WAS TO EXAMINE THE APP LICATION OF SECTION 68 IN THE CASE OF THE APPELLANT. INSTEAD OF ESTABLI SHING THAT THE EXPLANATION OFFERED REGARDING THE NATURE AND SOURCE OF CREDIT IN THE BOOKS OF THE APPELLANT IS NOT SATISFACTORY THE AO W ENT TO DISCUSS IN DETAIL THE FACTS RELATED WITH BHANWARLAL JAIN GROUP OF CAS ES. THE AO HAS NOT APPRECIATED THE FACT THAT SHE WAS NOT MAKING ASSESS MENT OF BHANWARLAL JAIN GROUP OF CASES. ON THE OTHER HAND, THE APPELLA NT WAS ABLE TO ESTABLISH THE IDENTITY AND THE CREDITWORTHINESS OF THE CREDITORS AS WELL AS THE GENUINENESS OF TRANSACTIONS. 4.7 RECENTLY THE HON'BLE BOMBAY HIGH COURT HAS PA SSED AN ORDER IN WP NO. 167 OF 2015 DATED 15.04.2015 IN THE CASE OF M/S RUSHABH ENTERPRISES VS ACIT 24(3) AND ORS. IN THIS CASE ALSO THE ASSESSEE HAD TAKEN LOAN FROM RELATED WITH BHANWARLAL JAIN GROUP OF CASES. IN FACT, ONE SUCH NAMELY M/S JEWEL DIAM ALSO FEATURES IN THE CASE OF THE APPELLANT. IN ITS ORDER THE HON'BLE BOMBAY HIGH C OURT IN ADDITION TO DECIDING THE LEGAL VALIDITY OF REOPENING OF ASSESSM ENT ALSO DISCUSSED THE FACTS OF THE CASE. THE HON'BLE BOMBAY HIGH COURT IN PARA 8 OF ITS ORDER STATED '......ACCORDING TO HER(AO) THE REVENUE HAS RECEIVE D INFORMATION FROM THE DGIT (INV) THAT THE ASSESSEE HAS TAKEN UNSECURED LO ANS FROM THE ABOVE PARTIES BY WAY OF UNACCOUNTED CASH/ACCOMMODATION ENTRIES. W E ARE UNABLE TO AGREE SINCE THE PETITIONER HAS CLEARLY STATED THAT ALL TH E PAYMENTS WERE MADE BY A/C PAYEE CHEQUES WHICH WERE ENCASHED IN THE BANK ACCOU NT OF THE PETITIONER IN THE REGULAR COURSE OF BUSINESS. WE FIND THAT THE PETITI ONER HAS ALSO PAID INTEREST ON THIS LOANS AFTER DEDUCTION OF TAX AT SOURCE AND TDS RETURNS ARE ALSO ACCORDINGLY FILED. THERE IS NO DISPUTE IN REGARD TO THE ABOVE. WE FIND NOTHING TO SUPPORT THE SAID CONTENTIONS OF THE REVENUE. THE REVENUE'S CONT ENTION IN THE AFFIDAVIT IN REPLY HAS NO MERIT. ON THE OTHER HAND, THE LOANS APPEAR T O BE TAKEN IN THE REGULAR COURSE OF BUSINESS 4.8 AFTER CONSIDERING THE TOTALITY OF FACTS, THE RI VAL SUBMISSIONS, APPLICABLE AND ON THE BASIS OF DISCUSSIONS MENTIONE D ABOVE I HAVE COME TO A CONCLUSION THAT NATURE AND SOURCE OF CREDIT IN THE BOOKS OF ACCOUNTS ITA NO.6990/MUM/2016 GUJARAT ESTATE. 7 OF THE APPELLANT STANDS EXPLAINED. CONSEQUENTLY, A DDITION U/S. 68 CANNOT BE SUSTAINED. THE GROUNDS OF APPEAL NOS. 2 & 3 ARE ACCORDINGLY ALLOWED AND ADDITION OF RS 44,13,984/- IS DELETED. 5. THE LEARNED DR SUBMITTED THAT THE LEARNED CIT(A) ERRED IN DELETING THE ADDITIONS MADE BY THE ASSESSING OFFICER TOWARDS UNS ECURED LOANS AND INTEREST RECEIVED FROM BHANWARLAL JAIN GROUP COMPANIES WITHO UT APPRECIATING THE FACT THAT SHRI BHANWARLAL JAIN HAD CATEGORICALLY ADMITTED IN STATEMENT BEFORE INVESTIGATION WING THAT HE WAS INVOLVED IN PROVIDING ACCOMMODATIO N ENTRIES. THE LEARNED DR FURTHER SUBMITTED THAT THE CIT(A) FAILED TO APPRECI ATE THE FACT THAT MERE FILING OF CONFIRMATION LETTERS ALONG WITH BANK STATEMENTS WOU LD NOT BE SUFFICIENT COMPLIANCE TO PROVE THE CREDITS FOUND IN THE BOOKS OF ACCOUNT. THE ASSESSING OFFICER HAS BROUGHT OUT CLEAR FACTS IN THE LIGHT OF THE INFORMA TION RECEIVED FROM INVESTIGATION WING THAT THE ASSESSEE IS BENEFICIARY OF THE ACCOMM ODATION ENTRIES PROVIDED BY BHANWARLAL JAIN GROUP COMPANIES AND, THEREFORE, THE ADDITIONS MADE BY THE ASSESSING OFFICER SHOULD BE UPHELD. ON THE OTHER H AND, LEARNED AR RELIED UPON THE CIT(A) ORDER 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIAL AVAILABLE ON RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BEL OW. THE ASSESSING OFFICER MADE ADDITION TOWARDS UNSECURED LOANS FROM M/S. A2 JEWEL S AND JEWEL DIAM, ON THE GROUND THAT THESE PARTIES WERE ENGAGED IN PROVIDING ACCOMMODATION ENTRIES OF UNSECURED LOANS THROUGH COMPANIES MAINTAINED BY SHR I BHANWARLAL JAIN. ACCORDING TO THE ASSESSING OFFICER SHRI BHANWARLAL JAIN HAS A DMITTED IN THE STATEMENT RECORDED U/S. 132(4) THAT HE IS INVOLVED IN PROVIDI NG ACCOMMODATION ENTRIES THROUGH THESE COMPANIES THE ASSESSING OFFICER FURTHER ADMI TTED THAT THOUGH THE ASSESSEE FILED CERTAIN EVIDENCES TO PROVE THE IDENTITY, HE F AILED TO PROVE THE GENUINENESS OF THE TRANSACTIONS AND THE CREDITWORTHINESS OF THE LE NDERS IN THE BACKDROP OF THE CLEAR FINDINGS FROM DGIT (INVESTIGATION), WHERE THE FACT OF PROVIDING ACCOMMODATION ENTRIES HAS BEEN BROUGHT OUT WITH EVIDENCES. THE A SSESSING OFFICER FURTHER OBSERVED THAT ALTHOUGH THE ASSESSEE HAS FILED CERTA IN EVIDENCES TO PROVE THE IDENTITY OF THE PARTIES, THE PARTIES FAILED TO APPE AR IN RESPONSE TO NOTICE U/S. 133(6). ITA NO.6990/MUM/2016 GUJARAT ESTATE. 8 THEREFORE, MERE FURNISHING OF LEDGER EXTRACT AND BA NK STATEMENTS WOULD NOT BE SUFFICIENT COMPLIANCE TO PROVE THE IDENTITY AND GEN UINENESS OF THE TRANSACTIONS. 7. THE ASSESSEE HAS FILED CONFIRMATION LETTER FROM THE LOAN CREDITORS ALONG WITH PAN AND INCOME TAX RETURN. ASSESSEE ALSO FILED BAN K STATEMENTS OF THE LOAN CREDITORS. THE LEARNED CIT(A) HAS RECORDED A CATEG ORICAL FINDING THAT THE ASSESSEE HAS FILED VARIOUS DETAILS TO PROVE THE IDENTITY AND GENUINENESS OF TRANSACTIONS. ALTHOUGH THE PARTIES DID NOT APPEAR BEFORE THE ASSE SSING OFFICER IN RESPONSE TO NOTICES U/S. 133(6), THE ASSESSEE HAS FILED ALL EVI DENCES BEFORE THE ASSESSING OFFICER TO PROVE THE LOAN TAKEN FROM THE ABOVE TWO PARTIES. THE ASSESSING OFFICER HAS NEVER DISPUTED THE IDENTITY OF THE PARTIES. THE AS SESSING OFFICER ALSO HAS ALSO NOT DISPUTED THAT THE ASSESSEE HAS FILED CONFIRMATION L ETTERS FROM THE PARTIES BUT MADE ADDITION ON THE BASIS OF INFORMATION RECEIVED FROM DGIT (INVESTIGATION) AND STATEMENT OF SHRI BHANWARLAL JAIN. BUT THE FACT RE MAINS THAT LATER SHRI BHANWARLAL JAIN HAS RETRACTED HIS STATEMENT MADE U/S. 132(4) B Y FILING AN AFFIDAVIT. THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER WAS INCORRECT IN MAKING THE ADDITIONS TOWARDS UNSECURED LOANS ONLY ON THE B ASIS OF STATEMENT OF SHRI BHANWARLAL JAIN WHEN SUCH STATEMENT HAS BEEN RETRAC TED BY THE PARTY. THE CIT(A) AFTER CONSIDERING RELEVANT FACTS HAS RIGHTLY DELETE D THE ADDITIONS MADE BY THE ASSESSING OFFICER. WE DO NOT FIND ANY ERROR OR INF IRMITY IN THE ORDER OF THE CIT(A). HENCE, WE ARE INCLINED TO UPHOLD THE ORDER OF THE C IT(A) AND DISMISS THE APPEAL FILED BY THE REVENUE. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 1 8 TH MAY 2018. SD/- SD/- (MAHAVIR SINGH) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED :18 TH MAY, 2018. SA ITA NO.6990/MUM/2016 GUJARAT ESTATE. 9 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE C I T(A), MUMBAI. 4. THE C I T 5. THE DR, G BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, MUMBAI