BHARAT KUMAR LUDHANI, Mumbai V. A.C.I.T. CENT. CIR. - 2(4), Mumbai

ITA 829/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6956 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 09-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAVITA P KAUSHIKLD
• Assessee Lawyers: ROHIT GOLECHA LD
• Keywords: Unexplained cash credit; Bogus Share capital; Corroborative evidences; Accommodation entries; Reassessment proceedings
• Section: 143(3); 48; 68; 148

Judgement Text

ITA NO.829/MUM/2018 BHARAT KUMAR LUDHANI ASSESSMENT YEAR :2012-13 1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, VP AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO 829/MUM/2018 ( / ASSESSMENT YEAR : 2012-13 ) BHARAT KUMAR LUDHANI 13, SHAILESH CHS LTD., LINKING ROAD, SANTACRUZ (W), MUMBAI 400 054. / VS. ACIT - CENTRAL CIRCLE 2(4), MUMBAI. %& ./ ./PAN/GIR NO. ACPPL-8007-K ( &( /APPELLANT ) : ( )*&( / RESPONDENT ) REVENUE BY : MS. KAVITA P. KAUSHIK-LD.DR ASSESSEE BY : SHRI ROHIT GOLECHA-LD. AR / DATE OF HEARING : 23/01/2020 / DATE OF PRONOUNCEMENT : 05/02/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2012-13 CONTEST THE ORDER OF L D. COMMISSIONER OF INCOME-TAX (APPEALS)-48, MUMBAI, [IN SHORT REFERRED TO AS CIT(A)], APPEAL NO. CIT(A)-48/IT-20/DCCC-2(4)/2016-17 DATED 31/11/2017 ON FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WE LL AS IN LAW THE LD. CIT(A) ERRED IN UPHOLDING THE ISSUANCE OF NOTICE OF NOTICE U/S 1 48 OF THE I.T. ACT TO REASSESS THE INCOME. REASONS ASSIGNED BY HIM FOR DOING THE SAME ARE WRONG AND INSUFFICIENT. ITA NO.829/MUM/2018 BHARAT KUMAR LUDHANI ASSESSMENT YEAR :2012-13 2 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WE LL AS IN LAW THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ADDITION OF UNSECURED LOAN O F RS. 30,00,000/- MADE BY THE LD. AO AS UNEXPLAINED CASH CREDIT U/S 68 OF THE I.T. AC T 1961. REASONS ASSIGNED BY HIM FOR DOING THE SAME ARE WRONG AND INSUFFICIENT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) ERRED IN ENHANCING THE INCOME OF THE APPELLANT BY TREATING U NSECURED LOAN OF RS. 10,00,000/- AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 4.THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELET E ALL OR MODIFY ANY OR ALL THE ABOVE GROUNDS OF APPEAL. HOWEVER, DURING HEARING BEFORE US, LD. AUTHORIZED R EPRESENTATIVE FOR ASSESSEE (AR) SUBMITTED THAT GROUND NO.1 OF THE APP EAL IS NOT BEING PRESSED AND ACCORDINGLY, THE GROUND NO.1 STANDS DIS MISSED AS BEING NOT PRESSED. GROUND NO.4 IS GENERAL IN NATURE WHICH WOULD NOT RE QUIRE ANY SPECIFIC ADJUDICATION ON OUR PART. 2.1 FACTS ON RECORD WOULD REVEAL THAT THE ASSESSEE BEING RESIDENT INDIVIDUAL WAS ASSESSED FOR YEAR UNDER CONSIDERATIO N U/S 143(3) R.W.S. 147 ON 17/03/2016 AT RS.60.30 LACS AFTER CERTAIN AD DITIONS OF RS.30 LACS AS AGAINST RETURNED INCOME OF RS.30.30 LACS FI LED BY THE ASSESSEE ON 31/07/2012. 2.2 THE REASSESSMENT PROCEEDINGS WERE TRIGGERED PUR SUANT TO SEARCH AND SURVEY ACTION CARRIED OUT BY THE DEPARTMENT IN THE CASE OF SHRI PRAVEEN KUMAR JAIN GROUP ON 01/10/2013. THE SEARCH ACTION RESULTED INTO COLLECTION OF EVIDENCES AND OTHER FINDINGS WHI CH CONCLUSIVELY PROVED THAT THE SAID GROUP, THROUGH A WEB OF CONCERNS, WAS ENGAGED IN PROVIDING ACCOMMODATION ENTRIES OF VARIED NATURE LI KE BOGUS UNSECURED LOANS, BOGUS SHARE APPLICATION AND BOGUS SALES ETC. IT WAS NOTED THAT THE ASSESSEE WAS IN RECEIPT OF UNSECURED LOANS OF RS.30 LACS FROM ONE OF THE ENTITIES NAMELY M/S ATHARV BUSINESS PVT. LTD. BELONGING TO SAID GROUP. ITA NO.829/MUM/2018 BHARAT KUMAR LUDHANI ASSESSMENT YEAR :2012-13 3 2.3 ACCORDINGLY, THE CASE WAS REOPENED BY ISSUANCE OF NOTICE U/S 148 ON 09/02/2015 WHICH WAS FOLLOWED BY STATUTORY NOTIC ES WHEREIN THE ASSESSEE WAS DIRECTED TO SUBSTANTIATE THE STATED TR ANSACTION. ALTHOUGH THE ASSESSEE DEFENDED THE SAME, HOWEVER, NOT CONVIN CED, LD. AO REJECTED ASSESSEES SUBMISSIONS AND ADDED THE AMOUN T OF RS.30 LACS TO THE INCOME OF THE ASSESSEE. 3. AGGRIEVED THE ASSESSEE CONTESTED THE SAME BEFORE LD. CIT(A), HOWEVER WITHOUT ANY SUCCESS WHEREIN LD. CIT(A) NOT ONLY CONFIRMED THE ADDITION OF RS.30 LACS BUT ENHANCED THE ADDITION BY RS.10 LACS SINCE IT TRANSPIRED THAT THE ASSESSEE WAS IN RECEIPT OF ANOT HER UNSECURED LOAN OF RS.10 LACS FROM ANOTHER GROUP ENTITY NAMELY M/S SUMUKH COMMERCIAL PVT. LTD. AGGRIEVED, THE ASSESSEE IS UNDER FURTHER APPEAL BEF ORE US. 4. THE LD. AR SUBMITTED THAT THE ASSESSEE HAD FURNI SHED SUFFICIENT DOCUMENTARY EVIDENCES TO PROVE THE GENUINENESS OF T HE TRANSACTION CARRIED OUT WITH M/S ATHARV BUSINESS PVT. LTD. THESE EVIDENCES WERE IN THE SHAPE OF RELEVANT BANK STATEMENTS AS WELL AS LO AN CONFIRMATIONS OF THE LENDER, COPY OF INCOME TAX RETURN ACKNOWLEDGEME NT & AUDITED ACCOUNTS OF THE LENDER. THE LD. AO COMPLETELY IGNOR ED THE SAME AND FAILED TO CARRY OUT ANY INDEPENDENT INVESTIGATION T O BRING ON RECORD ANY CORROBORATIVE EVIDENCES TO SUPPORT THE CONCLUSIONS THAT THE TRANSACTIONS WERE NOT GENUINE. AU CONTRAIRE, LD. DR SUBMITTED THAT THE ASSESSEE OBTAINED ENTRIES FROM THE TAINTED GROUP AND THE SEA RCH ACTION REVEALED THAT THE SAID GROUP WAS ENGAGED MERELY IN PROVIDING ACCOMMODATION ENTRIES OF VARIED NATURE. 5. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS AN D PERUSED RELEVANT MATERIAL ON RECORD. THE DOCUMENTS PLACED I N THE PAPER-BOOK ITA NO.829/MUM/2018 BHARAT KUMAR LUDHANI ASSESSMENT YEAR :2012-13 4 ESTABLISH THAT THE ASSESSEE HAS PLACED ON RECORD CO NFIRMATION OF ACCOUNT STATEMENT & RESPECTIVE BANK STATEMENTS RELATING TO TRANSACTION DONE WITH M/S ATHARV BUSINESS PVT. LTD. THE PERUSAL OF THE SAME REVEAL THAT THE ASSESSEE HAS OBTAINED LOAN OF RS.30 LACS FROM THE S AID ENTITY ON 03/03/2012 THROUGH BANKING CHANNELS. THE ASSESSEE H AS PAID INTEREST OF RS.27,616/- AGAINST THE SAME ON 31/03/2012. FURTHER , THIS LOAN HAS SUBSEQUENTLY BEEN SQUARED OFF ON 16/05/2012 WITH IN TEREST OF RS.44,384/-. THERE ARE NO IMMEDIATE CASH DEPOSITS I N THE BANK ACCOUNT OF SAID ENTITY BEFORE TRANSFER OF FUNDS TO THE ASSE SSEE. THE ASSESSEE HAS ALSO PLACED ON RECORD THE INCOME TAX ACKNOWLEDGEMEN T OF THE SAID ENTITY AS WELL AS ITS AUDITED FINANCIAL STATEMENTS, WHEREIN THE STATED TRANSACTIONS HAVE DULY BEEN REFLECTED. SIMILAR ARE THE DOCUMENTS WITH RESPECT TO SECOND ENTITY NAMELY M/S SUMUKH COMMERCIAL PVT. LTD. THE PERUSAL OF THESE DOCUMENTS WOULD LEAD TO A CONCLUSI ON THAT THE ASSESSEE HAD PROVED THE IDENTITY OF THE LENDER, THE IR CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS. THE ONUS WAS O N REVENUE TO REBUT THE SAME. HOWEVER, EXCEPT FOR RELYING UPON THE FIND INGS OF INVESTIGATION WING, NO INDEPENDENT INQUIRIES WERE CONDUCTED BY LD . AO TO REBUT THE ASSESSEES DOCUMENTARY EVIDENCES AND CORROBORATE TH E CONCLUSION THAT THE TRANSACTIONS WERE FICTITIOUS TRANSACTIONS. IN F ACT, THE ASSESSEE HAD REPAID THE UNSECURED LOANS TO THE LENDERS WITHIN A SHORT SPAN OF TIME EVEN BEFORE THE SEARCH PROCEEDINGS WERE CARRIED OUT AGAINST THE SAID GROUP ON 01/10/2013. NOTHING WAS BROUGHT ON RECORD TO DEMONSTRATE THAT ANY CASH WAS EXCHANGED BETWEEN THE ASSESSEE AN D THE LENDERS. THEREFORE, ACCEPTING THE ARGUMENTS ADVANCED BY LD. AR, WE DELETE THE IMPUGNED ADDITION OF RS.40 LACS. ITA NO.829/MUM/2018 BHARAT KUMAR LUDHANI ASSESSMENT YEAR :2012-13 5 6. RESULTANTLY, THE APPEAL STANDS PARTLY ALLOWED IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH FEBRUARY, 2020. SD/- SD/- (MAHAVIR SINGH) (MANOJ K UMAR AGGARWAL) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI; DATED : 05/02/2020 SR.PS, JAISY VARGHESE !'! / COPY OF THE ORDER FORWARDED TO : 1. &( / THE APPELLANT 2. )*&( / THE RESPONDENT 3. 1 ( ) / THE CIT(A) 4. 1 / CIT CONCERNED 5. 23),4 , 4 , / DR, ITAT, MUMBAI 6. 3567 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.