Appeal Details
Counselvise Citation
[2022] 104 COUNSELVISE.COM (IT) 4621 (ITAT-INDORE)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
1 year(s) 4 month(s) 12 day(s)
Appellant
Respondent
Appeal Type
Income Tax (Search & Seizure) Appeal
Pronouncement Date
25-04-2022
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Assessment Year
2012-2013
Appeal Filed On
13-12-2020
Judgement Text
आयकर अपील य अ धकरण, इंदौर यायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER VIRTUAL HEARING IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Mumbai बनाम/ Vs. ACIT(Central)-1 Indore (Appellant) (Respondent ) P.A. No.AAECG5465C Appellant by S/Shri Anil Kamal Garg & Arpit Gaur, CAs Respondent by Shri P.K. Mitra, CIT-DR Date of Hearing: 27.01.2022 Date of Pronouncement: 26.04.2022 आदेश / O R D E R PER BENCH: The above captioned appeals filed at the instance of the Assessee are directed against the Common Order of the Ld. Commissioner of Income Tax (Appeals)-3, Bhopal (in short ‘CIT(A)’), dated 23.09.2020, which is arising out of the Common Assessment Order u/s. 143(3) r.w.s. 153A of the Income-Tax Act, 1961 (in short, ‘the Act’) dated 16.08.2019 passed by the ACIT (Central) -I, Indore. 2.1 Grounds of appeal raised by the Assessee for AY 2012-13 in IT(SS)A No.70/Ind/2020: “1. That, on the facts and in the circumstances of the case, the action of the learned CIT(A) in confirming the additions to the extent of Rs.1,50,54,863/- IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 2 of 74 made by the AO in the appellant’s income, is quite unjustified, unwarranted, excessive, arbitrary and bad-in-law. 2. That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the AO’s action of making the impugned additions in the appellant’s income for the relevant assessment year without considering the material fact that having already furnished original return of income under s.139 of the Act, on the date of initiation of the search under s. 132, no assessment proceeding was pending in respect of the assessment year under consideration and therefore, without having recourse to any seized incriminating document or material, no addition could have been made on any count in view of the settled legal position. 3a). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition to the extent of Rs.1,50,54,863/- made by the AO in the appellant’s income on account of alleged unexplained unsecured loans by invoking the provisions of s.68 of the Act and payment of interest thereon, without considering the material fact that having already furnished original return of income under s.139(1) of the Act, on the date of initiation of the search under s. 132, no assessment proceeding was pending in respect of the assessment year under consideration and therefore, without having recourse to any seized incriminating document or material, merely on the basis of entries found recorded in the regular books of account, no addition could have been made. 3b). That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the impugned addition to the extent of Rs.1,50,54,863/- without confronting the appellant with any information as regard to the creditors allegedly gathered behind the back of the appellant either in the case of the appellant itself or in the cases of some other assessees and as also, without giving any opportunity of cross-examination to the appellant. 3c). That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the impugned addition to the extent of Rs.1,50,54,863/- without considering the material fact that the appellant had duly discharged its initial onus of proving the identity of the loan creditors, the genuineness of the transactions and creditworthiness of loan creditors beyond all doubts by producing all the necessary documentary evidences. 3d). That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the AO’s action of making the impugned addition without adhering to the appellant’s prayer to issue either summons under s.131 or letters under s.133(6) of the Act to the loan creditors. 3e). That, without prejudice to the above, the learned CIT(A) grossly erred in confirming the addition to the extent of Rs.54,863/- made by the AO in the appellant’s income on account of disallowance of interest on unsecured loans, claimed by the appellant, by invoking the provisions of s. 69C r.w.s. 115BBE of the Act, without considering the material fact that the interest expenditure so claimed by the appellant, were duly recorded in its regular books of account, and the same have been incurred out of the explained sources and therefore, the provisions of s. 69C could not have been invoked in the instant case. IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 3 of 74 3f). That, without prejudice to the above, the learned CIT(A) grossly erred in confirming the impugned addition of Rs.54,863/- on account of disallowance of interest on unsecured loans without considering the material fact that the interest expenditure so claimed by the appellant were genuinely incurred by it on the genuine borrowings of the loans made for the purpose of its business. 4. That, the appellant further craves leave to add, alter and/or amend any of the foregoing grounds of appeal as and when considered necessary.” 2.2 Grounds of appeal raised by the Assessee for AY 2014-15 in IT(SS)A No.71/Ind/2020: “1. That, on the facts and in the circumstances of the case, the action of the learned CIT(A) in confirming the entire additions aggregating to a sum of Rs.1,89,81,875/- made by the AO in the appellant’s income, is quite unjustified, unwarranted, excessive, arbitrary and bad-in-law. 2. That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the AO’s action of making the impugned additions in the appellant’s income for the relevant assessment year without considering the material fact that having already furnished original return of income under s.139 of the Act, on the date of initiation of the search under s. 132, no assessment proceeding was pending in respect of the assessment year under consideration and therefore, without having recourse to any seized incriminating document or material, no addition could have been made on any count in view of the settled legal position. 3a). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition of Rs.1,89,81,875/- made by the AO in the appellant’s income on account of alleged unexplained unsecured loans by invoking the provisions of s.68 of the Act and payment of interest thereon, without considering the material fact that having already furnished original return of income under s.139(1) of the Act, on the date of initiation of the search under s. 132, no assessment proceeding was pending in respect of the assessment year under consideration and therefore, without having recourse to any seized incriminating document or material, merely on the basis of entries found recorded in the regular books of account, no addition could have been made. 3b). That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the impugned addition of Rs.1,89,81,875/- without confronting the appellant with any information as regard to the creditors allegedly gathered behind the back of the appellant either in the case of the appellant itself or in the cases of some other assessees and as also, without giving any opportunity of cross-examination to the appellant. 3c). That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the impugned addition of Rs.1,89,81,875/- without considering the material fact that the appellant had duly discharged its initial onus of proving the identity of the loan creditors, the genuineness of the transactions and creditworthiness of loan creditors beyond all doubts by producing all the necessary documentary evidences. IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 4 of 74 3d). That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the AO’s action of making the impugned addition without adhering to the appellant’s prayer to issue either summons under s.131 or letters under s.133(6) of the Act to the loan creditors. 3e). That, without prejudice to the above, the learned CIT(A) grossly erred in confirming the addition of Rs.4,81,875/- made by the AO in the appellant’s income on account of disallowance of interest on unsecured loans, claimed by the appellant, by invoking the provisions of s. 69C r.w.s. 115BBE of the Act, without considering the material fact that the interest expenditure so claimed by the appellant, were duly recorded in its regular books of account, and the same have been incurred out of the explained sources and therefore, the provisions of s. 69C could not have been invoked in the instant case. 3f). That, without prejudice to the above, the learned CIT(A) grossly erred in confirming the addition of Rs.4,81,875/- on account of disallowance of interest on unsecured loans without considering the material fact that the interest expenditure so claimed by the appellant were genuinely incurred by it on the genuine borrowings of the loans made for the purpose of its business. 4. That, the appellant further craves leave to add, alter and/or amend any of the foregoing grounds of appeal as and when considered necessary.” 2.3 Grounds of appeal raised by the Assessee for AY 2015-16 in IT(SS)A No. 72/Ind/2020: “1. That, on the facts and in the circumstances of the case, the action of the learned CIT(A) in confirming the additions to the extent of Rs.16,77,174/- made by the AO in the appellant’s income, is quite unjustified, unwarranted, excessive, arbitrary and bad-in-law. 2a). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition to the extent of Rs.16,77,174/- on account of payment of interest on unsecured loans, by invoking the provisions of s. 69C r.w.s. 115BBE of the Act, without confronting the appellant with any information as regard to the creditors allegedly gathered behind the back of the appellant either in the case of the appellant itself or in the cases of some other assessees and as also, without giving any opportunity of cross-examination to the appellant. 2b). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the impugned addition to the extent of Rs.16,77,174/- without considering the material fact that the appellant had duly discharged its initial onus of proving the identity of the loan creditors, the genuineness of the transactions and creditworthiness of loan creditors beyond all doubts by producing all the necessary documentary evidences and therefore, no disallowance of interest qua such loans was warranted. 2c). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the AO’s action of making the impugned addition without adhering to the appellant’s prayer to issue either summons under s.131 or letters under s.133(6) of the Act to the loan creditors. 2d). That, the learned CIT(A) grossly erred in confirming the addition of Rs.16,77,174/- made by the AO in the appellant’s income on account of IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 5 of 74 disallowance of interest on unsecured loans, claimed by the appellant, by invoking the provisions of s. 69C r.w.s. 115BBE of the Act, without considering the material fact that the interest expenditure so claimed by the appellant, were duly recorded in its regular books of account, and the same have been incurred out of the explained sources and therefore, the provisions of s. 69C could not have been invoked in the instant case. 2e). That, the learned CIT(A) grossly erred in confirming the addition of Rs.16,77,174/- on account of disallowance of interest on unsecured loans without considering the material fact that the interest expenditure so claimed by the appellant were genuinely incurred by it on the genuine borrowings of the loans made for the purpose of its business. 3. That, the appellant further craves leave to add, alter and/or amend any of the foregoing grounds of appeal as and when considered necessary.” 2.4 Grounds of appeal raised by the Assessee for AY 2016-17 in IT(SS)A No. 73/Ind/2020: “1. That, on the facts and in the circumstances of the case, the action of the learned CIT(A) in confirming the additions to the extent of Rs.21,52,945/- made by the AO in the appellant’s income, is quite unjustified, unwarranted, excessive, arbitrary and bad-in-law. 2a). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition to the extent of Rs.21,52,945/- on account of alleged unexplained unsecured loans by invoking the provisions of s.68 of the Act and payment of interest thereon, without confronting the appellant with any information as regard to the creditors allegedly gathered behind the back of the appellant either in the case of the appellant itself or in the cases of some other assessees and as also, without giving any opportunity of cross- examination to the appellant. 2b). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the impugned addition to the extent of Rs.21,52,945/- without considering the material fact that the appellant had duly discharged its initial onus of proving the identity of the loan creditors, the genuineness of the transactions and creditworthiness of loan creditors beyond all doubts by producing all the necessary documentary evidences and therefore, no disallowance of interest qua such loans was warranted. 2c). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the AO’s action of making the impugned addition without adhering to the appellant’s prayer to issue either summons under s.131 or letters under s.133(6) of the Act to the loan creditors. 2d). That, the learned CIT(A) grossly erred in confirming the addition of Rs.18,52,945/- made by the AO in the appellant’s income on account of disallowance of interest on unsecured loans, claimed by the appellant, by invoking the provisions of s. 69C r.w.s. 115BBE of the Act, without considering the material fact that the interest expenditure so claimed by the appellant, were duly recorded in its regular books of account, and the same have been incurred out of the explained sources and therefore, the provisions of s. 69C could not have been invoked in the instant case. IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 6 of 74 2e). That, the learned CIT(A) grossly erred in confirming the addition of Rs.18,52,945/- on account of disallowance of interest on unsecured loans without considering the material fact that the interest expenditure so claimed by the appellant were genuinely incurred by it on the genuine borrowings of the loans made for the purpose of its business. 3. That, the appellant further craves leave to add, alter and/or amend any of the foregoing grounds of appeal as and when considered necessary.” 2.5 Grounds of appeal raised by the Assessee for AY 2017-18 in IT(SS)A No. 74/Ind/2020: “1. That, on the facts and in the circumstances of the case, the action of the learned CIT(A) in confirming the additions to the extent of Rs.85,44,654/- made by the AO in the appellant’s income, is quite unjustified, unwarranted, excessive, arbitrary and bad-in-law. 2a). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition to the extent of Rs.85,44,654/- on account of alleged unexplained unsecured loans by invoking the provisions of s.68 of the Act and payment of interest thereon, without confronting the appellant with any information as regard to the creditors allegedly gathered behind the back of the appellant either in the case of the appellant itself or in the cases of some other assessees and as also, without giving any opportunity of cross- examination to the appellant. 2b). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the impugned addition to the extent of Rs.85,44,654/- without considering the material fact that the appellant had duly discharged its initial onus of proving the identity of the loan creditors, the genuineness of the transactions and creditworthiness of loan creditors beyond all doubts by producing all the necessary documentary evidences. 2c). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the AO’s action of making the impugned addition without adhering to the appellant’s prayer to issue either summons under s.131 or letters under s.133(6) of the Act to the loan creditors. 2d). That, the learned CIT(A) grossly erred in confirming the addition of Rs.14,44,654/- made by the AO in the appellant’s income on account of disallowance of interest on unsecured loans, claimed by the appellant, by invoking the provisions of s. 69C r.w.s. 115BBE of the Act, without considering the material fact that the interest expenditure so claimed by the appellant, were duly recorded in its regular books of account, and the same have been incurred out of the explained sources and therefore, the provisions of s. 69C could not have been invoked in the instant case. 2e). That, the learned CIT(A) grossly erred in confirming the addition of Rs.14,44,654/- on account of disallowance of interest on unsecured loans without considering the material fact that the interest expenditure so claimed by the appellant were genuinely incurred by it on the genuine borrowings of the loans made for the purpose of its business. 3. That, the learned CIT(A) grossly erred, in law, in confirming the action of the AO in invoking the provisions of section 115BBE of the Act in respect of IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 7 of 74 disallowance of interest made without considering the material fact that in the appellant’s case, the nature of addition to the income was not falling in any of the deeming provisions of the Act and therefore, the provisions of section 115BBE of the Act could not have been invoked in the appellant’s case. 4. That, the appellant further craves leave to add, alter and/or amend any of the foregoing grounds of appeal as and when considered necessary.” 3.1 The brief facts of the case as culled out from the records are that the assessee is a private limited company and belongs to Dixit/ Global Group. The assessee company was formed with the main object of dealing in real estate and development of infrastructure. However, during the assessment years under appeal, the major sources of income of the assessee company were from rent and parking charges. The assessee furnished its original returns of income for the various years u/s. 139 of the I.T. Act, 1961. Search and seizure operations u/s. 132 were carried out at various premises of Global group and the assessee on 12/07/2016. As the warrant of authorization u/s. 132 was issued in the name of the assessee also, notices u/s. 153A were issued to the assessee for A.Y. 2012-13 to A.Y. 2016-17 on 09/10/2017. In response to the above notices, the assessee filed returns of income for A.Y. 2012-13 to A.Y. 2016-17 on 14/03/2018. The assessee furnished its regular return of income for A.Y. 2017-18 on 30/03/2018. The details of returns of income for A.Y. 2012-13, A.Y. 2014-15 to 2017-18 are as under: A.Y. Date of filing of Return u/s. 139 Returned income (in Rs.) Date of filing of Return in response to the notice u/s. 153A Income declared in Return u/s. 153A (In Rs.) Additional Income offered, if any (In Rs.) 2012-13 30/11/2012 12,030/- 14/03/2018 12,030/- Nil 2014-15 21/09/2014 1,08,700/- 14/03/2018 1,08,700/- Nil 2015-16 30/10/2015 (-)2,22,987/- 14/03/2018 (-)2,22,987/- Nil 2016-17 31/03/2017 Nil 14/03/2018 Nil Nil 2017-18 30/03/2018 Nil NA NA Nil 3.2 In the case of the assessee, a reference was made for special audit u/s. 142(2A) of the Act and accordingly, the special auditors submitted their report on 20.06.2019. The report of the special auditors, as produced by the assessee, was duly perused and considered by the AO and as also, by the CIT(A). A copy of the Special Auditors Report was also filed by the assessee before this Bench which has been perused and placed on record. 3.3 Finally, the AO made additions of Rs.1,60,32,263/- in A.Y. 2012-13, Rs.23,00,000/- in A.Y. 2013-14, Rs.1,89,81,875/- in A.Y. 2014-15, Rs.20,72,174/- in A.Y. 2015-16, Rs.21,87,135/- in A.Y. 2016-17 and Rs.85,76,149/- in A.Y. 2017-18 on account of unexplained cash credits u/s. 68 and unexplained expenditure u/s. 69C, respectively, in respect of IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 8 of 74 unsecured loans claimed to have been obtained by the assessee and interest expenses thereon (Para 8). 4. Aggrieved assessee preferred separate appeals for all the assessment years under consideration before Ld. CIT(A). Before the ld. CIT(A), the assessee filed additional evidences for AY 2012-13, A.Y. 2014-15 to AY 2016-17 in respect of the sole issue of unexplained cash credits u/s. 68 in the form of unsecured loans. The additional evidences furnished by the assessee were admitted by the ld. CIT(A) and the additional evidences were forwarded to the AO for his comments. The AO submitted the common remand report vide his letter dated 14/09/2020, which is placed at page no. 421 to 438 of the Paper Book of the assessee for A.Y. 2012-13. A copy of the Remand Report was provided to the assessee for making its counter comments and accordingly, the assessee vide its letter dated 22/09/2020, as placed at page no. 439 to 444 of the assessee’s Paper Book for A.Y. 2012- 13, made its counter comments before the ld. CIT(A).The ld. CIT(A), after taking into consideration the AOs findings, report of the special auditors, assessee’s oral and written submissions made in the course of the hearing, remand report submitted by the AO and comments thereon by the assessee as well as the facts of the case, vide his common Order dated 23.09.2020 adjudicated the appeals of the assessee thereby giving a meager relief and confirming substantial additions for the assessment years under consideration. 5. Now, aggrieved by the additions confirmed by the ld. CIT(A), the assessee is in appeal before this Tribunal for the assessment years under consideration. Against the meager relief granted by the ld. CIT(A), the revenue has not preferred any appeal before us due to low tax effect. 6. As all the appeals relate to the same assessee and the issues raised are common, they were heard together and are being disposed off by this common order for sake of convenience and brevity. 7. Ground No. 1 of the Assessee common for all the assessment years under consideration 7.1 Through this ground of appeal, the assessee has challenged the additions confirmed by the ld. CIT(A). In the written submissions, the assessee itself has submitted that in the Appeal Memos, it has taken separate grounds of appeal in respect of the addition confirmed by the ld. CIT(A) and therefore, no separate adjudication on this Ground is warranted. Accordingly, this ground of appeal for A.Y. 2012-13, A.Y. 2014-15to A.Y. 2017-18 is hereby Dismissed. 8. Ground No. 2 of the Assessee for A.Y. 2012-13& A.Y. 2014-15 8.1 Through the Ground No. 1 taken for A.Y. 2012-13& A.Y. 2014-15, the assessee has challenged the action of the ld. CIT(A) in upholding the additions made by the AO in completed assessment years without having recourse to any incriminating material found during the course of search. IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 9 of 74 8.2 Before the ld. CIT(A), the assessee furnished the detailed written submissions on the subject ground, which has been reproduced by the ld. CIT(A) at page no. 16 to 24 of his Order. While adjudicating the ground, the ld. CIT(A) held that for A.Y. 2012-13 and A.Y. 2014-15, the assessee had filed its return of income u/s. 139 of the Act much prior to the date of search and seizure operations in its case which were carried out on 12/07/2016. The ld. CIT(A) further held that as on the date of the search no assessment proceedings were pending for such assessment years and further, the time limit for issuance of any notice u/s. 143(2) had also got expired on 30/09/2015 and no such notice was issued to the assessee prior to the date of the search. Thus, the ld. CIT(A) went on holding that for A.Y. 2012-13 and A.Y. 2014-15, the assessment proceedings had got completed and therefore, they did not get abated in accordance with the second proviso to section 153A(1) of the Act. However, having given these findings, the ld. CIT(A) further held that during the course of the search and seizure operations carried u/s. 132 of the Act, in the various premises of the Dixit/Global Group, various incriminating bills, vouchers, loose papers, documents etc. were found evidencing deriving of substantial amount of undisclosed income by the assessee and other group assessees. The ld. CIT(A) also held that the assessee had shown to have received some amount under the garb of unsecured loans from various companies operated by one defamed entry operator namely Shri Sharad Darak which could be revealed only during the course of the search proceedings. Thus, the ld. CIT(A) did not find any substance in the contention of the assessee that for the aforesaid assessment years, no incriminating documents or materials were found or seized. 8.3 Aggrieved with the Order of the ld. CIT(A), the assessee has preferred appeals before us. 8.4 Before us, the learned CIT(DR) vehemently argued supporting the observations of the AO and the ld. CIT(A) on this issue. However, during the course of the hearing before us, the ld. CIT(DR) failed to bring on record any incriminating material on the basis whereof the subject additions were made in the A.Y. 2012-13& A.Y. 2014-15. 8.5 Per Contra, Learned Counsel for the assessee has filed written submission before us. The relevant part of the assessee's submission for this contention is being reproduced as under: “D. Key Points of Assessee’s Submission and Relevant Pages of the Paper Books: 1.01 That, in the instant case, the impugned assessment order has been framed by the learned Assessing Officer in pursuance of the Search Operations carried out under the provisions of s.132 in the business premises of the assessee company as well as in the residential premises of its directors. IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 10 of 74 1.02 That, on the date of initiation of the search under s.132 of the Act, i.e. on 12-07-2016, no assessment proceedings were pending in respect of the assessment year under consideration. Further, during the course of search operations carried out in the business premises of the assessee and as also in the residential premises of its directors along with the group concerns, not even a single incriminating material or document or valuable article or thing, pertaining to the assessment year under consideration, was found on the basis of which addition has been made by the learned AO in the returned income of the assessee. 1.03 The learned AO has made the impugned additions of Rs.1,60,32,263/- in the assessee’s income for A.Y. 2012-13 and that of Rs. 1,89,81,875/- for A.Y. 2014-15. The additions have been made by the AO on account of unsecured loan obtained by the assessee company by invoking provisions of section 68 of the Act and disallowance of interest expenditure thereon, without having any recourse to any seized incriminating document or material or valuable article found during the course of search proceedings. Such an act on the part of the learned AO is patently wrong, unjustified, unwarranted and bad in the eyes of law in view of the facts and circumstances of the case and as also in view of the settled legal position as discussed in the ensuing paras. 2.01 On a plain reading of the provisions of section 153A, one may note that these provisions can be set into motion only in the case of a person where a search is initiated under s. 132 or books of account, other documents or any assets are requisitioned under s. 132A. Even, the caption of the provision is read as ‘assessment in case of search or requisition’. Thus, there remains no doubt to the proposition that the section 153A cannot be invoked in each and any case but it can be invoked only for the purpose of making an assessment or reassessment in the case of a person in whose case either a search under s. 132 is initiated or a requisition under s. 132A is made. The sole purpose of the section 153A is to bring home the tax on the undisclosed income, unearthed during the course of action under s. 132/ 132A, to the kitty of the ex-chequer. It is submitted that the section 153A is not meant for assessing/ reassessing any income which in the opinion of revenue authorities has escaped to the assessment and for that there are other provisions such as section 147 and section 263 in the statute. Although, not explicitly stated, the provisions of section 153A are aimed for making the assessment/ reassessment, for six assessment years, of the persons searched/ requisitioned, only, on the basis of money, bullion, jewellery, other valuable articles or things or books of account or documents found and seized either under s. 132 or requisitioned under s. 132A. In other words, subject to certain exceptions, as discussed here-in-after, under the scheme of the law any assessment/ reassessment under the provisions of section 153A has to be made only on the basis of incriminating material or undisclosed assets found during the course of action under s. 132/ 132A and it cannot be made on those issues in respect of which no incriminating material/ undisclosed asset was found. 2.02 It is submitted that normally provisions of section 132 are invoked only when the authorizing officer being the Principal Director General or IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 11 of 74 Principal Director or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or Additional Director or Additional Commissioner or Joint Director or Joint Commissioner, in consequence of information in his possession, has reason to believe that any person is in possession of some money, bullion, jewellery or other valuable articles or things or books of account or documents which have not been or would not have been disclosed by such person for the purpose of the Income-Tax Act, 1961. The purpose of the provisions of section 132 is not to make any assessment or reassessment but to gather the material necessary for the purpose of making assessment or reassessment. It is submitted that the provisions of section 132 are not aimed for discovery of those assets, books or documents or transactions, which are already in the specific knowledge or domain of the revenue or if required may come in the specific knowledge or domain of the revenue. It shall thus be appreciated that the provisions of section 132 are not meant for verifying the transactions which are already recorded in the regular books of account of an assessee. For such verification, the powers of assessment or reassessment are duly vested with the AO under the provisions of section 143/ 147 of the Act. As a natural corollary it thus follows that very purpose of initiating action under s. 132 is to unearth or discover any undisclosed income or undisclosed asset of an assessee and its objective is not at all to verify the veracity of the transactions already recorded in the regular books of account or in respect of which assessments have already attained finality. Since, the provisions of section 153A have the sole objective of framing the assessment/ reassessment in the case of a person in whose case search under s. 132 is initiated or requisition under s. 132 is made, it has to be necessarily concluded that the scope of the assessment/ reassessment under the provisions of section 153A is limited and restricted only to the undisclosed income based upon the incriminating material/ undisclosed assets found during the course of search/ requisition. 2.03 It is submitted that the scheme of section 153A takes within its sweeps not only the assessment/ reassessment for those completed assessment years in respect of which either the assessments under s. 143(3) have already got completed previously or the time limit for issuance of notice under s. 143(2) have got expired but it also include those assessment years in respect of which either the assessment proceedings were pending or the statutory time limit for issuance of notice under s. 143(2) were alive, on the date of initiation of the search. The later situation has been contemplated under clause (b) of sub- section (1) to section 153A of the Act which prescribes that all the assessment proceedings which are pending on the date of search shall get abate. It is so because while legislating the law the legislature were not intending to carry out two parallel assessment/ reassessment proceedings for the same assessment years under two different sections which was the situation prevalent in the old block assessment scheme under Chapter XIV-B of the Act in respect of search initiated up till 31st day of May, 2003. It is therefore, it has been prescribed that no sooner any search under s. 132 takes place in case of any assessee, all the assessment proceedings which were either in the motion or which were pending shall come to a halt. IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 12 of 74 2.04 It is submitted that under the provisions of section 153A of the Act, assessment or reassessment of total income of the person searched or requisitioned for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made has to be made by the concerning Assessing Officer. Under the second proviso to section 153A, it has been enjoined that assessment or reassessment, if any, relating to any of the six assessment years which is pending on the date of initiation of the search or making the requisition shall abate. On a plain reading of the proviso, it becomes abundantly clear that only the assessment proceedings which were pending on the date of initiation of search or requisition shall get abate whereas the assessment proceedings for other assessment years, which have attained finality, shall not get abated. Thus, a clear cut distinction has been made in the section itself in respect of those assessment years in respect of which proceedings have attained finality at the AO stage and those assessment years where the assessment proceeding have not so attained the finality at AO stage. It is submitted that while making the assessment under s. 153A, an AO has to make a specific distinction for non-abated assessment years with that of the abated assessment years. 3.00 It is submitted that the issue relating to scope of assessment under s. 153A/153C is not res integra. The Hon’ble High Court of Delhi in the case of CIT vs. Kabul Chawla (2015) 9 TMI 80 (Del.), after considering all the available decisions on the issue has held that in respect of the completed assessment, additions can be made only on the basis of incriminating documents. 3.01 Your Honours, earlier the Hon’ble High Court of Rajasthan in the case of Jai Steel (India) vs. CIT (2013) 259 CTR 281 (Raj.) has also held that in respect of the assessment years which have got abated due to initiation of the search, an AO is free to make addition on any ground but in respect of the assessment years which have got completed before the date of the search, the assessment has to be made on the basis of the material seized during the course of search. 3.02 Your Honours, the decision of the Hon'ble Delhi High Court in the case of Kabul Chawla has been followed by the Hon'ble Gujarat High Court in the case of Pr. CIT vs. Saumya Construction Pvt. Ltd. (2016) 387 ITR 529 (Guj.) and again in the case of Pr. CIT vs. Deepak Jashwantlal Panchal (2017) 397 ITR 153 (Guj.). 3.03 Your Honours, it is submitted that following the above judgment of the Hon’ble Delhi High Court, the Hon’ble jurisdictional Indore Bench of ITAT in case of Kalani Brothers in IT(SS)A No. 71/Ind/2014 and again in the case of Anant Steel Pvt. Ltd. in IT(SS)A Nos. 31, 28, 29 & 30/Ind/2010 and in many other cases, has held that in respect of the completed assessment years, in absence of any incriminating documents found and seized during the course of search, no addition can be made. 3.04 Reliance is also placed on the following judicial pronouncements: IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 13 of 74 i) Pr. CIT vs. Smt. Kusum Gupta (2015) 9 TMI 1406 (DelHC) ii) CIT vs. RRJ Securities Ltd. (2016) 380 ITR 612 (DelHC) iii) Pr. CIT vs. Mrs. Lata Jain (2016) 384 ITR 543 (DelHC) iv) Pr. CIT vs. Jai Infrastructure & Properties Pvt. Ltd. (2016) 10 TMI 1022 (GujHC) v) CIT vs. Anil Kumar Bhatia 211 Taxman 453 (Del) vi) Amandeep Singh Bhatia vs. Addl. CIT (2016) 29 ITJ 1 (Indore- Trib) vii) Bhatia International Ltd. vs. Addl. CIT (2016) 29 ITJ 109 (Trib- Indore) viii) Pr. CIT vs. Dharampal Premchand Ltd. (2018) 408 ITR 0170 (Del. HC) ix) Pr. CIT & Ors. vs. Meeta Gutgutia & Ors. (2017) 295 CTR 0466 (Del.) x) Pr. CIT vs. Dipak J Panchal (2017) 397 ITR 0153 (Guj.) xi) Pr. CIT vs. Devangi Alias Rupa (2017) 98 CCH 0051 (Guj.) xii) Rakesh Kumar Jain vs. DCIT (2019) 57 CCH 0098 (Jaipur Trib.) xiii) DCIT vs. SMS SME Ltd. (2019) 57 CCH 0031 (Gau. Trib.) xiv) Rashmi Metaliks Ltd. and ANR vs. DCIT and ANR (2019) 72 ITR (Trib.) 0226 (Kolkata) xv) Amitbhai Manubhai Kachadiya and Ors. vs. DCIT (2019) 56 CCH 0189 (SuratTrib.) xvi) Smt. Sanjana Mittal vs. DCIT (2019) 55 CCH 0644 Asr Trib. xvii) SVM Buildcon Pvt. Ltd. vs. DCIT [IT(SS) A no. 71/Ind/2016 Order dated 26-10-2017] xviii) Chugh Real Estate Pvt. Ltd. vs. DCIT [IT(SS) A no. 60&61/Ind/2016 Order dated 26-10-2017] xix) Kamta Prasad Dwivedi vs. ACIT-1(1), Bhopal 2018 (9) TMI 1746 – ITAT Indore xx) Smt. Rashmi Mujumdar vs. DCIT(Central)-1, Bhopal 2018 (12) TMI 688 – ITAT Indore xxi) ACIT vs. Sudeep Maheshwari [ITA No. 524/Ind/2013, Order dated 13-02-2019] xxii) M/s. Ultimate Builders vs. ACIT [ITA No. 134/Ind/2019, Order dated 09-08-2019] xxiii) Sainath Builders vs. ACIT (2019) 35 ITJ 77 (Trib.-Indore) xxiv) DCIT-2(1), Indore vs. Shri Satish Neema [IT(SS) 149, 150 & 152/Ind/2016; Order dated 07-02-2020] 4.00 Your Honours, in the instant case, undisputedly, the assessee had voluntarily furnished its return of income under the provisions of s.139 of the Act for A.Y. 2012-13 on 30-11-2012 and further since, the time limit for issuance of notice under s.143(2) in response to the return so filed had also got expired much before the date of initiation of search, it has to be necessarily regarded that as on the date of search, i.e. on 12- 07-2016, the assessment of the assessee for the assessment year IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 14 of 74 2012-13 was not pending and the same had got completed. In view of such position, the assessment year under consideration cannot be termed to be a year in respect of which assessment proceedings got abated in terms of second proviso to sub-section (1) of section 153A of the Act. It shall be worthwhile to mention here that in many of the judicial authorities, as cited above, it has been held that if in respect of any assessment year, an assessee had filed a return under s.139 and the time limit for issuance of notice under s.143(2) in respect of such return had got expired before the date of search, such assessment year would have to be regarded as a year in respect of which no proceeding was pending. 5.00 Your Honours, the similar legal ground was also raised by the assessee before the ld. CIT(A). However, The ld. CIT(A) at para (4.3.2) at page nos. 24 of the impugned Order dismissed the ground. The ld. CIT(A) held that during the course of the search under s. 132 in the various premises of the Dixit/Global Group, various incriminating bills, vouchers, loose papers, documents etc. were found evidencing deriving of substantial amount of undisclosed income by the assessee and other group assessee. The ld. CIT(A) further held that the assessee had shown receipt of amount under the garb of unsecured loans from various companies operated by one defamed entry operator namely Shri Sharad Darak and such fact could be revealed only during the course of the search proceedings. 5.01 Your Honours, it is humbly submitted that none of the findings given by the ld. CIT(A) is factually correct. It is submitted that during the course of the search proceedings, not even a single incriminating document was found relating to the assessee and even, the ld. AO while making the various additions in the income of the assessee for A.Y. 2012-13 & A.Y. 2014-15 has not made any reference of any seized document. Even further, while submitting his Remand Report, the ld. AO has not rebbuted the claim of the assessee made before the ld. CIT(A) that none of the additions is based upon any seized material. It is submitted that although in the opening lines of para (8.5) at page no. 8 of the assessment order, the ld. AO has mentioned that upon analysis of seized documents, he noticed that some documents were found & seized during the course of the search but, in the entire body of the assessment order, there is not a whisper or mention of any such so called seized document. It is submitted that even in the Show Cause Notices issued to the assessee, as abstracted by the ld. AO himself at para (8.1) of his assessment order, there is no reference of any so called seized documents. It is submitted that the entire additions have been made by the ld. AO only based upon the regular books of account maintained by the assessee company in its normal course of business and no addition is based upon any incriminating seized material. 5.02 Your Honours, it is submitted that the second ground taken by the ld. CIT(A) for dismissing the legal plea of the assessee is that according to the ld. CIT(A), the assessee had obtained accommodation entries from some entry operator. It is submitted that first of all, such a finding is factually incorrect, as demonstrated in the subsequent paras and even if it is assumed to be correct, it would not meet the requirement of IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 15 of 74 seized material as contemplated in the decision of Kabul Chawla supra and other judicial pronouncements. 6.00 Your Honours, in view of the facts and circumstances of the case of the assessee and various judicial pronouncements, it is submitted that since the assessment years 2012-13 & 2014-15 are the years in respect of which assessment proceedings had already got completed and the same were not pending on the date of the search, any addition which is not based on any incriminating material found during the course of search is not legally sustainable and the same deserves to be knocked down on the threshold itself.” 9.1 We have heard rival contentions, perused the records placed before us, duly considered the facts and circumstances, carefully gone through the orders of the authorities below, written and oral submissions made from both the sides and as also, various judicial authorities cited by both the sides. 9.2 We find that search and seizure operations u/s 132(1) were carried out in the case of assessee on 12/07/2016. We further find that, prior to the date of search, the assessee had already filed its returns of income, u/s. 139 of the Act, for A.Y. 2012-13 and A.Y. 2014-15, on 30/11/2012 and 24/09/2014 respectively. We noted that as on the date of search, i.e. 12/07/2016, no assessment proceedings were pending for AYs 2012-13& 2014-15 and further, time limit for issuance of any notice under s.143(2) had also got expired on 30-09-2015 but, no such notice was issued to the assessee prior to the date of the search. In such circumstances, it can be concluded that for A.Y. 2012-13& A.Y. 2014-15, the assessment proceedings had got completed and they did not get abated in accordance with the second proviso to the provisions of section 153A(1) of the Act, as also held by the ld. CIT(A). 9.3 We also find that the AO, while making the additions on account of non-genuine unsecured loans in the two assessment years viz. A.Y. 2012- 13& A.Y. 2014-15, has not made any single reference to any incriminating material found during the course of the search. We find that in the instant case, the AO has made the additions in the A.Y. 2012-13 & A.Y. 2014-15 on the sole basis of the audited financial statements furnished by the assessee during the course of the assessment proceedings and the entries found made in the tally data containing the regular books of account of the assessee, without making reference of any seized document or any other evidence gathered during the course of search. Before us, the ld. CIT (DR) also could not bring on record any single incriminating material on the basis whereof the additions have been made by the AO in the assessment order for the aforesaid two assessment years. In our considered view, even in respect of the loan transactions claimed to have been carried out by the assessee with various companies operated by Shri Sharad Darak, while making the additions, the AO has not made specific reference of any single seized document or material. Thus, in our considered view, the two assessment years viz. A.Y. 2012-13 and A.Y. 2014-15 are non-abated IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 16 of 74 assessment years and therefore, as per the settled position of the law, any addition in such non-abated assessment years could have been made only on the basis of some incriminating material or evidences gathered during the course of the search which is not a case here. 9.4 We find support from the decision of the Hon’ble Delhi High Court in the case of CIT vs. Kabul Chawla (2016) 380 ITR 53 (Del HC) wherein the Hon’ble Court after considering various judgments had dealt with this issue as under: “37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax". iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 17 of 74 material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment.” 9.5 The above stated ratio laid down by the Hon’ble Delhi High Court has been applied by this Tribunal in the case of Kalani Bros. [IT(SS) No.71/Ind/2015 dated 6.11.15] observing as follows:- "We have heard both the sides. We have also gone through the case laws relied upon by both the sides. We have also considered various relevant facts of the case. It is a settled legal position that once a search and seizure action has taken place u/ s 132 of the Act or a requisition has been made u/ s 132A, the provisions of section 153A trigged and Assessing Officer is bound to issue notice u/ s 153A of the Act. Once notices are issued u/ s 153A of, the Act then assessee is legally obliged to file return of income for six years. The assessment and reassessment for six years shall be finalised by the Assessing Officer. It is also held by various Courts that once notice u/ s 153A of the Act issued, then assessment for six years shall be at large both for Assessing Officer and assessee have no warrant of law. It has been also held that in the assessment years where assessments have been abated in terms of second proviso to section 153A then Assessing Officer acts under original jurisdiction and one assessment is made for total income including the addition made on the basis of seized material. But where there is no abatement of assessments and assessments were completed on the date of search then addition can be made only on the basis of incriminating documents or undisclosed assets, etc. In these cases there was no incriminating document found and seized. No assessment proceedings were abated in these assessees. Thus assessments for these assessment years were completed on the date of search. The assessments were completed u/ s 143(3} of the Act read with section 153A/ 153C of the Act after the search. There was no abatement of any proceedings in these cases for these assessment years in terms of second proviso to section 153A of the Act. There is no seized material belonging to the assessee which was found and seized in relation to additions made. In. a recent decision, Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawla (supra) has held that completed assessments can be interfered with by the Assessing Officer while making assessment u/ s 153A of the Act, only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which was not produced or not already disclosed or made known in the course of original assessment. In. all these cases no assessments were pending on the date of search for these assessment years. No assessments were abated in terms of second proviso to section 153A of the Act. Hon'ble Delhi High / Court in the case of CIT vs. Kabul Chawla (supra) has considered various High Court decisions relied upon by the learned DR. The Hon'ble Delhi High Court has considered the cases of Canara Housing Development Co. vs. DCfT; Madugula vs. DCIT; CIT vs. Chetandas Laxmandas and CIT vs. Anil Kumar Bhatia (supra). The only decision of the Hon'ble Allahabad High Court in the case of CIT vs. Raj Kumar Arora; 367 ITR 517 relied on by the learned DR was not considered by Hon'ble Delhi High Court while deciding the issue in the case of Kabul Chawla. IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 18 of 74 The Hon'ble Allahabad High Court has reversed the order of the Tribunal and remanded the issue to the Tribunal to consider the appeal of the department on merits. It is a settled legal position that when two views are possible on a particulars issue then the view favourable to the assessee should be followed as held by the Hon'ble Apex Court in the case of CIT vs. Vegetable Products; 88 ITR 192. Respectively following the decision of the Hon'ble Apex Court, we dismiss the ground of appeals of the Revenue. Departmental appeals are disposed accordingly." 9.6 Similar view also taken in the case of DCIT, Indore vs. Shri Satish Neema (2020) 37 ITJ 308 (Trib. Indore).and in the case of Rajmohan Agrawal (Ind), Bhopal vs. ACIT-2(1), Bhopal [IT(SS)A No.04/Ind/2019 Order dated 07-09-2021] 9.7 Thus, respectfully following the settled judicial precedence which are squarely applicable on the instant issue, we are of the view that while making an assessment under s.153A of the Act in pursuance of a search under s.132, no addition could have been made by the AO in the assessee’s income in a completed year of assessment without having recourse to any incriminating material. Accordingly, in our considered view, the action of the ld. CIT(A) in confirming the AO’s action of making additions in completed years of assessment i.e. A.Y. 2012-13 and A.Y. 2014-15, without having any recourse to any incriminating material was unjustified and unwarranted. Thus, the Ground No. 1 of the assessee for A.Y. 2012-13& A.Y. 2014-15 is Allowed. 10. Ground Nos. 3(a) to 3(f) of the Assessee for A.Y. 2012-13& A.Y. 2014- 15; and Ground Nos. 2(a) to2(e) of the Assessee for A.Y. 2015-16 to A.Y. 2017-18; 10.1 Through the ground nos. 3(a) to 3(f) for A.Y. 2012-13& A.Y. 2014-15 and ground nos. 2(a) to 2(e) for A.Y. 2015-16 to A.Y. 2017-18, the assessee has challenged the action of the ld. CIT(A) in upholding the additions to the tune of Rs.1,50,00,000/- (A.Y. 2012-13), Rs.1,85,00,000/- (A.Y. 2014-15), Rs.3,00,000/- (A.Y. 2016-17) & Rs.71,00,000/- (A.Y. 2017-18),made by the AO on account of unsecured loans obtained by the assessee company from various entities and additions to the extent of Rs.54,863/- (A.Y. 2012-13), Rs.4,81,875/- (A.Y. 2014-15), Rs.16,77,174/- (A.Y. 2015-16), Rs.18,52,945/- (A.Y. 2016-17) & Rs.14,44,654/- (A.Y. 2017-18) on account of interest payments thereon. 10.2 Briefly stated facts of the issue, as culled out from the records, are that during the search and post search proceedings, it was found by the AO that the assessee had accepted unsecured loans from certain dubious/ shell entities/ companies. According to the AO, some of such entities/ companies were found to be managed/ controlled directly/ indirectly by a well-known entry provider of Indore namely Shri Sharad Darak and some of the loan creditor companies were self-managed shell companies of the group itself which were used for routing of unaccounted funds, while some of these loans were shown as accepted from employees/ others. Accordingly, the AO IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 19 of 74 issued show-cause notices dated 31/10/2018 and 19/07/2019 to the assessee before as well as after the receipt of Special Audit Report. In reply, the assessee, vide its letters dated 07.12.2018 and 30.07.2019, furnished its detailed explanation along with documentary evidences in support of establishing the identity & creditworthiness of loan creditors and genuineness of loan transactions. The AO, while framing the assessment order, averted that the assessee had accepted unsecured loans from shell/ paper companies and employees. Finally, vide details given in para (8.53), the AO made an addition of Rs.1,60,32,263/- in A.Y. 2012-13, Rs.23,00,000/- in A.Y. 2013-14, Rs.1,89,81,875/- in A.Y. 2014-15, Rs.20,72,174/- in A.Y. 2015-16, Rs.21,87,135/- in A.Y. 2016-17 and Rs.85,76,149/- in A.Y. 2017-18 by holding the unsecured loans obtained by the assessee and interest paid thereon as unexplained cash credits u/s. 68 and unexplained expenditure u/s. 69C respectively. 10.3 Aggrieved with the Order of Assessment, the assessee preferred separate appeals for the subject assessment years before the ld. CIT(A). During the course of the first appellate proceedings, the assessee made detailed written submissions along with the documentary evidences which were also furnished by it before the AO. Before the ld. CIT(A), the assessee also furnished certain additional evidences, under Rule 46A, to substantiate the identity & creditworthiness of the lenders and genuineness of loan transactions which were forwarded to the Assessing Officer for comments. The copy of the Remand Report of the AO was provided by the ld. CIT(A) to the assessee and in response, the assessee filed its rejoinder. The Ld. CIT(A), after considering the remand report of the AO as well as the rejoinder of the assessee, confirmed the substantial additions made by the AO in respect of the unsecured loans obtained from certain entities/ persons thereby deleting meager additions made in respect of the certain lender entities. The ld. CIT(A) has given the relevant findings in respect of the unsecured loans obtained from various entities at paras (4.4.9) to (4.4.12) of his order. The relevant findings of the ld. CIT(A) are reproduced as under: “4.4.9 I have considered the facts of the case, the assessment order, the written as well as oral submissions of the appellant, the Special Audit Report of the Special Auditors, the remand report of the AO and the counter comments of the appellant. I find that for the assessment years under consideration, the AO has made additions u/s. 68 of the Act, in respect of the various loan creditors. In order to analyse the facts of each of the loan creditors, I have considered it necessary to give my findings, separately, for all such creditors as under: D. (i) M/s. Jayant Security & Finance Ltd.[loan - Rs.75,00,000/-] [Interest – Rs. 40,685/-] – A.Y. 2012-13; (ii) M/s. Jay Jyoti India Pvt. Ltd.[loan - Rs.75,00,000/-] [Interest – Rs. 14,178/-] – A.Y. 2012-13; (iii) M/s. Octagon Media Matrix Pvt. Ltd.[loan - Rs.50,00,000/-] [Interest – Rs.1,12,500/-] – A.Y. 2014-15; (iv) M/s. Rajwadi Retail Trade Systems Pvt. Ltd.[loan - Rs.50,00,000/- in A.Y. 2014-15] [Interest – Rs.1,12,500/- in A.Y. 2014-15, Rs.4,54,058/- in A.Y. 2015-16, Rs.4,92,202/- in A.Y. 2016-17, Rs.3,75,948/- in A.Y. 2017-18]; (v) M/s. Ranjit Securities Pvt. Ltd.[loan - IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 20 of 74 Rs.35,00,000/- in A.Y. 2014-15] [Interest – Rs.1,44,375/- in A.Y. 2014-15, Rs.3,15,000/- in A.Y. 2015-16, Rs.3,49,709/- in A.Y. 2016-17]; (vi) M/s. Suzlon Securities Pvt. Ltd.[loan - Rs.50,00,000/- in A.Y. 2014-15] [Interest – Rs.1,12,500/- in A.Y. 2014-15, Rs.4,54,058/- in A.Y. 2015-16, Rs.4,92,202/- in A.Y. 2016-17, & Rs.4,59,970/- in A.Y. 2017-18]; (vii) M/s. East West Finvest India Ltd.[loan - Rs.3,00,000/- in A.Y. 2016-17] [Interest – Rs.26,630/- in A.Y. 2016-17 &Rs.62,270/- in A.Y. 2017-18]; (viii) M/s. Zyka Merchandise Pvt. Ltd.[loan - Rs.10,00,000/- in A.Y. 2017-18] [Interest – Rs.17,207/- in A.Y. 2017-18] The AO vide para 8.14 of the assessment order has held that all the aforesaid companies are controlled/ managed companies and associated concerns of Shri Sharad Darak, a well known accommodation entry provider. Since the findings in respect of all the aforesaid companies have been commonly given by the AO at para (8.3) to para (8.28) of the impugned Order, the cash credits in respect of all such cash creditor companies are being dealt with together. The written submission made by the appellant during appellate proceedings in respect of the above mentioned companies are on same line contending that (i) during the course of the assessment proceedings, it had furnished all the necessary documents to establish the identity of the loan creditors, the genuineness of the loan transactions and the creditworthiness of the loan creditors, as contemplated under the provisions of s.68 of the Act; (ii) after having discharged its initial onus of proving during the course of the assessment proceedings, the appellant had specifically requested the AO to issue the summons u/s. 131 / notices u/s. 133(6)to the loan creditors but despite making such specific request, the AO did not do the same and made the addition; (iii) the entire additions have been made by the AO only on the basis of findings given by the Special Auditors which were not factually correct without applying his own mind; (iv) the AO except relying upon some information gathered behind the back of the appellant by some other authorities in some other proceedings did not bring on record any adverse material against the appellant; (v) during the course of the assessment proceedings, no incriminating material or document was found wherefrom it could have been inferred that the unsecured loan transactions recorded in the regular books of account of the appellant were not genuine; (vi) in respect of some of the lender companies, allegedly controlled by Shri Sharad Darak, the Income Tax Department has duly framed assessments u/s. 143(3) of the Act which fact establishes the actual existence and identity of such companies; (vii) in respect of some of the lender companies allegedly belonging to Shri Sharad Darak, even during the course of the income tax appeals, before the Hon’ble Income Tax Appellate Tribunal, genuineness of the transactions have been approved by the Hon’ble ITAT; (viii) the AO has relied upon only hearsays and some information without confronting the same to the appellant and without giving the opportunity of any cross examination; (ix) the transactions carried out by the appellant were of the nature of loan and not of the nature of share capital or share premium and therefore, it was not required to prove the source of the source as contemplated under the proviso to section 68 of the Act; and (x) since the interest expenditure were fully recorded in the books, the provisions of section 69C could not have been invoked. I have carefully considered the findings of the AO, written submissions made by the appellant, Special Audit Report, remand report of the AO and the rejoinder of the appellant thereon. I find that during the course of the appellate proceedings, the appellant has furnished documents for establishing its claim IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 21 of 74 regarding the identity of the loan creditors, genuineness of the transactions and creditworthiness of the loan creditors. The appellant has furnished the documents such as copies of certificates of incorporation, memorandum & articles of association, copies of income-tax returns, copies of master data downloaded from website of MCA, copies of loan confirmation letters duly given by the lender companies, copies of relevant bank statements of the lender companies, copies of the relevant bank statements of the appellant, copies of the audited financial statements of the lender companies, copies of the Affidavits duly sworn by Shri Sharad Darak confirming the loan transactions and in some cases, copies of the assessment orders passed u/s. 143(3) of the Act. However, furnishing of all these documents by themselves cannot establish the genuineness of the loan transactions which goes to the root of section 68 of the Act. I find that from the various enquiries conducted by the Investigation Wing and various income-tax authorities, now it has got established beyond all doubts that Sharad Darak is a defamous entry provider of Indore. The genuineness of the loans provided by the companies of Shri Sharad Darak have not been accepted in various cases. Once it is proved that the assessee has taken any loan from any entry provider company then, furnishing of any documentary evidences cannot establish the loan transactions as contemplated u/s 68 of the Act. The AO has rightly placed his reliance on the various judicial pronouncements mentioned in the body of the assessment order. In view of above, I find no infirmity in the action of the AO in making the additions u/s. 68 as well as u/s. 69C in respect of the unsecured loans shown to have been taken by the appellant from the above named eight companies. Accordingly, the additions of Rs.1,50,00,000/- for A.Y. 2012-13, Rs.1,85,00,000/- for A.Y. 2014-15, Rs.3,00,000/- for A.Y. 2016- 17 and Rs.71,00,000/- for A.Y. 2017-18 made by the AO u/s. 68 of the Act on account of unsecured loans taken from aforesaid eight companies are confirmed. Correspondingly, the additions of Rs.54,863/- for A.Y. 2012-13, Rs.4,81,875/- for A.Y. 2014-15, Rs.16,77,174/- for A.Y. 2015-16, Rs.18,52,945/- for A.Y. 2016-17 and Rs.14,58,889/- for A.Y. 2017-18 made by the AO u/s. 69C of the Act on account of disallowance of interest claimed to have been paid by the appellant on aforesaid loans from eight companies are also hereby confirmed. 4.4.10 Accordingly, out of the various additions made by the AO vide para (8.53) of the Order, for A.Y. 2012-13, A.Y. 2013-14, A.Y. 2014-15, A.Y. 2015- 16, A.Y. 2016-17 and A.Y. 2017-18, on account of unsecured loans u/s. 68 and interest expenditure u/s. 69C, respectively at Rs.1,60,32,263/- in A.Y. 2012-13, Rs.23,00,000/- in A.Y. 2013-14, Rs.1,89,81,875/- in A.Y. 2014-15, Rs.20,72,174/- in A.Y. 2015-16, Rs.21,87,135/- in A.Y. 2016-17 and Rs.85,76,149/- in A.Y. 2017-18, the appellant would get relief of Rs.9,77,400/- for A.Y. 2012-13, Rs.23,00,000/- for A.Y. 2013-14, Rs.3,95,000/- for A.Y. 2015-16, Rs.34,190/- for A.Y. 2016-17 and Rs.31,495/- for A.Y. 2017-18. Accordingly, such additions are hereby Deleted. Consequently, the additions to the extent of Rs.1,50,54,863/- in A.Y. 2012-13, Rs.1,89,81,875/- in A.Y. 2014-15, Rs.16,77,174/- in A.Y. 2015-16, Rs.21,52,945/- in A.Y. 2016-17 and Rs.14,44,654/- in A.Y. 2017-18 are hereby Confirmed. Therefore, appeal on these grounds is Partly Allowed.” 10.4 Aggrieved with the Order of the ld. CIT(A), the assessee is in appeal before us. IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 22 of 74 10.5 Before us, learned CIT(DR) vehemently argued supporting the observations of the AO as well as of the ld. CIT(A) on this issue. 10.6 Per Contra, Learned Counsel for the assessee has filed written submission before us. The relevant portion of such written submission is being reproduced as under: “Details of the Additions confirmed by the ld. CIT(A) for which the assessee is in Appeal : A.Y. Name of the Lender Principal Sum Interest Total Relevant Finding by the CIT(A) Remarks 2012- 13 M/s. Jayant Security and Finance Ltd. 75,00,000 40,685 75,40,685 Para (4.4.9)[D] at page no. 129 to 132 Sharad Darak Company M/s. Jay Jyoti India Pvt. Ltd. 75,00,000 14,178 75,14,178 --- do --- --- do--- TOTAL 1,50,00,000 54,863 1,50,54,863 2014- 15 M/s. Octagon Media Matrix Pvt. Ltd. 50,00,000 1,12,500 51,12,500 --- do --- --- do--- M/s. Rajwadi Retail Trade Systems Pvt. Ltd. 50,00,000 1,12,500 51,12,500 --- do --- --- do--- M/s. Ranjeet Securities Ltd. 35,00,000 1,44,375 36,44,375 --- do --- --- do--- M/s. Suzlon Securities Pvt. Ltd. 50,00,000 1,12,500 51,12,500 --- do --- --- do--- TOTAL 1,85,00,000 4,81,875 1,89,81,875 2015- 16 M/s. Octagon Media Matrix Pvt. Ltd. - 4,54,058 4,54,058 --- do --- --- do--- M/s. Rajwadi Retail Trade Systems Pvt. Ltd. - 4,54,058 4,54,058 --- do --- --- do--- M/s. Ranjeet Securities Ltd. - 3,15,000 3,15,000 --- do --- --- do--- M/s. Suzlon - 4,54,058 4,54,058 --- do --- --- do--- IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 23 of 74 Securities Pvt. Ltd. TOTAL - 16,77,174 16,77,174 2016- 17 M/s. East West India Finvest Ltd. 3,00,000 26,630 3,26,630 --- do --- --- do--- M/s. Octagon Media Matrix Pvt. Ltd. - 4,92,202 4,92,202 --- do --- --- do--- M/s. Rajwadi Retail Trade Systems Pvt. Ltd. - 4,92,202 4,92,202 --- do --- --- do--- M/s. Ranjeet Securities Ltd. - 3,49,709 3,49,709 --- do --- --- do--- M/s. Suzlon Securities Pvt. Ltd. - 4,92,202 4,92,202 --- do --- --- do--- TOTAL 3,00,000 18,52,945 22,52,945 2017- 18 M/s. Octagon Media Matrix Pvt. Ltd. 43,00,000 5,30,107 48,30,107 --- do --- --- do--- M/s. Rajwadi Retail Trade Systems Pvt. Ltd. - 3,75,948 3,75,948 --- do --- --- do--- M/s. Suzlon Securities Pvt. Ltd. - 4,59,069 4,59,069 --- do --- --- do--- M/s. East West Fivest Ltd. 18,00,000 62,270 18,62,270 --- do --- --- do--- M/s. Zyka Merchandise Pvt. Ltd. 10,00,000 17,260 10,17,260 --- do --- --- do--- TOTAL 71,00,000 14,44,654 85,44,654 LEAD YEAR : A.Y. 2012-13 A. Relevant Para and Page Nos. of the AO’s Common Order : Para (8) at page no. 4 to Para (8.53) at page no. 47. (Operative Para [8.53] at page no. 47) B. Relevant Paras and Page Nos. of the CIT(A)’s Common Order : Para (4.4) at page no. 25 to Para (4.4.10) at page no. 133. (Operative Para [4.4.10] at page no. 133) IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 24 of 74 C. Our Detailed Submissions, on the subject issue, as made before the ld. CIT(A): Page No. 12 to 50 of Paper Book for A.Y. 2012-13 D. Key Points of Assessee’s Submission and Relevant Pages of the Paper Books: 1.00 Your Honours, at the outset, it is submitted that the impugned addition of Rs.1,60,32,263/- so made by the learned AO suffers from the legal infirmity inasmuch such addition has been made by the learned AO merely on the basis of the some entries found in the regular books of account of the assessee without having recourse to any incriminating material found or seized during the course of the search. 1.01 As has already been discussed elaborately, in respect of the Legal ground for A.Y. 2012-13 & A.Y. 2014-15 in the appeals before Your Honours, it is reiterated that on the date of initiation of the search under s. 132, no assessment proceeding was pending in respect of the assessment years A.Y. 2012-13 & A.Y. 2014-15 and therefore, without having recourse to any seized incriminating document or material, no addition could have been made in the total income of the assessee. 1.02 Your Honours, at para (8.5) of the impugned assessment order, the learned AO has made an attempt to justify his action of making the addition on the pretext that during the course of the search proceedings details of unsecured loans were found mentioned in documents and tally datas seized during the course of search. According to the AO, such details and tally datas meet the requirement of existence of incriminating material for making the additions. In this regard, it is submitted that such a premise taken by the ld. AO is patently wrong and against the established canon of law. It is submitted that the details and tally datas, as referred to by the ld. AO in the body of the assessment order, were maintained by the assessee in its ordinary course of business and based upon such datas only the assessee had furnished its returns of income under s.139 of the Act, from year to year, much prior to the date of the search and therefore, by no stretch of imagination, it can be inferred that such datas were either not disclosed by the assessee or were not purported to be disclosed by the assessee before the Income Tax Authorities, as contemplated under s.132 of the Act. In such circumstances, the nature of documents and tally datas so seized cannot be held to be of the incriminating nature. Consequently, such details and datas would not meet out the requirement of seized material as contemplated under the various judicial pronouncements in which it has been held that in respect of the completed assessment years no addition can be made without having any recourse to seized material. In other words, the details of unsecured loans and tally data, as referred to by the ld. AO in the assessment order cannot be said to be incriminating material so as to give rise to making of addition on the basis of such materials. For such proposition reliance is placed on the following judicial pronouncements: IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 25 of 74 i) ACIT vs. M/s. Jackson Ltd. (2020) (1) TMI 1054 – ITAT Del. ii) Lord Krishna Dwellers (P)Ltd. vs. DCIT (2019) 197 TTJ 0502 (Del.) 3.01 Your Honours, during the course of the assessment proceedings, the learned AO vide his show-cause notice dated 19-07-2019 [kindly refer Page No. 111 to 114], had required the assessee to furnish its explanation on the subject issue. In response to the aforesaid query, the assessee vide its letter dated 30-07-2019 [kindly refer Page No. 115 to 151], made its very elaborative explanation on the subject issue along with ample of documentary evidences, filed by way of furnishing a separate Volume marked as ‘Volume –UL’. By tendering the explanations which were duly supported by all the necessary documentary evidences, the assessee had discharged its initial onus of proving the identity of the loan creditors, the genuineness of the transactions and creditworthiness of loan creditors beyond all doubts and in accordance with the provisions of s.68 of the Act. Consequently, no addition in the hands of the assessee was warranted under s. 68 of the Act, in respect of the subject loan amounts. 3.02 Your Honours, despite making the explanation as aforesaid, the learned AO made the impugned addition of Rs.1,60,32,263/- merely on his whims, surmises, presumptions, assumptions and extraneous considerations and also without bringing any adverse material on record to substantiate his allegation that the assessee was engaged in routing its own unaccounted funds into its books of account in form of cash credits, by making its employees and other persons/ concerns as conduit for the same. 3.03 Your Honours, the learned AO, at page no. 46 & 47 of the impugned assessment order has given the break-up of the sum of Rs.1,60,32,263/- in respect of which the subject addition has been made for the assessment year under consideration. For the sake of convenience, the break-up so given is summarized, in a tabular form, as under: S. No. Name of the loan creditor Amount A. Loans from Companies managed/ controlled by Shri Sharad Darak 1. M/s. Jayant Security & Finance Ltd. 75,40,685 2. M/s. Jay Jyoti India Pvt. Ltd. 75,14,178 TOTAL (A) 1,50,54,863 B. Loan From Employee 3. Smt. Kshamta Dubey 9,77,400 TOTAL (B) 9,77,400 GRAND TOTAL (A+B) 1,60,32,263 4.00 Your Honours, during the course of assessment proceedings, the assessee vide its letter dated 30-07-2019 [kindly refer Page No 115 to 151 of our paper book], had furnished the necessary documentary evidences to establish the identity of the loan creditors, the genuineness of the loan transactions and the creditworthiness of the loan creditors, as contemplated under the provisions of s.68 of the Act. IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 26 of 74 5.00 Your Honours, it is submitted that the assessee, by furnishing the necessary documents, had duly discharged its initial onus of proving the identity of the loan creditors, the genuineness of the transactions and creditworthiness of loan creditors beyond all doubts and in accordance with the provisions of s.68 of the Act. It is further submitted that during the course of assessment proceedings, the assessee, vide para (9.00) of its letter dated 30-07-2019 [kindly refer PB Page No. 115 to 151], had specifically requested the learned AO that if he wish to make further verification or investigation in the matter, then summons under s.131 or letters under s.133(6) of the Act to the loan creditors may be issued in order to further substantiate the claim of the assessee. However, despite making such specific request, the learned AO did not carry out any enquiry by himself and proceeded further in regarding the impugned unsecured loan as unexplained credits of the assessee. Such a failure on the part of the learned AO is not permissible and is bad-in-law. For such proposition, reliance is placed on the following judicial pronouncements : i) CIT vs. Shri Sai Vihar (2016) 28 ITJ 158 (Trib. - Raipur) ii) CIT V Ramesh Chander Shukla 10 ITJ 286 (Madhya Pradesh HC) iii) Manna Lal Murlidhar79 ITR 540 iv) Radhe Sham Jagdish Prashad 117 ITR 186 v) G. Shubha Devi vs. ITO (2019) 307 CTR 0536 (Kar.) vi) Anil Kumar Midha (HUF) vs. ITO (2006) 100 TTJ 0644 vii) ITO vs. Sanjay Kumar Goel (2007) 108 TTJ 0823 (Del.) viii) Mass Con (India) Pvt. Ltd. vs. ITO (2013) 37 CCH 0143 (Del.) ix) CIT vs. Rajeev Shukla (2007) 207 CTR 0253 (MP HC) 6.00 Your Honours, it is submitted that once the initial onus has been discharged by the assessee the burden to prove the credits as unexplained shifts from the shoulder of the assessee to the taxing authorities. It is submitted that, in the instant case, the learned AO has failed to discharge his onus by failing to substantiate his assertion with the aid of corroborative evidences and thus, there was absolutely no justification for the learned AO to make the impugned addition merely on the basis of some hearsay allegations against the loan creditors and information gathered behind the back of the assessee. 7.00 Your Honours, the ld. AO, for making the impugned addition, relied on the reports submitted by the Special Auditors u/s. 142(2A) of the Act. However, during the course of assessment proceedings, the assessee had got its preliminary objection registered against the observation made by the ld. AO as well as by the Special Auditors appointed under s.142(2A) of the Act, that the scope of the Special Auditors had to be restricted to the examination, verification and audit of books of account and other documents, pertaining to the assessee or as found and seized during the course of the search. The scope would not include an investigation into the affairs of the auditee or for that matter, to occupy the judgment seat of an Assessing Officer. The scheme of the Special Audit nowhere contemplates satisfaction of the Special Auditors as IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 27 of 74 regard to the genuineness of the loan transactions which have duly been recorded in the books of account. The Assessing Officer who is competent to examine the ingredients of the cash credits such as identity of the loan creditor, genuineness of the transactions and creditworthiness of the loan creditor as contemplated under the provisions of s.68 of the Act and it is his satisfaction only, which matters for invocation of provisions of s.68 of the Act. It is submitted that in the instant case, the ld. AO is heavily harping on the comments given by the Special Auditors in their Report without even going through the various documentary evidences already placed by the assessee company on his record for establishing the genuineness of the loan transactions as claimed by the assessee. 8.01 Your Honours, it has been averted by the ld. AO in para (8) of the impugned Order that during search and post search proceedings, it was found that the assessee has accepted unsecured loans from certain dubious/ shell entities/ companies. Some of such entities/ companies were found to be managed/ controlled by Shri Sharad Darak, a well known accommodation entry provider. Your Honours, it is submitted that the assessee or any of its functionaries do not know any entry provider and have never made any transaction with any entry provider. 8.02 Your Honours, the ld. Assessing Officer, at paras (8.12) to (8.20) of the impugned Assessment Order, has given a finding related to entities/ companies allegedly managed/ controlled by Shri Sharad Darak. In the aforesaid paras, the ld. AO has alleged that Shri Sharad Darak through his companies had been involved in providing the accommodation entries to the assessee and to its group companies. It is submitted that the assessee had genuinely borrowed unsecured loans from certain companies and had never got indulged in routing of its unaccounted money, as alleged by the learned AO. It is submitted that during the course of the assessment proceedings, the assessee had duly furnished all the necessary documents for establishing the identity and creditworthiness of the lender companies and as also, the genuineness of the loan transactions carried out by it during the periods under assessment. 8.03 In nutshell, during the course of the assessment proceedings, the assessee had duly discharged its onus of proving the credit entries found recorded in its books of account, as contemplated under the provisions of s.68 of the Act, by furnishing all the necessary documentary evidences. Further, the learned AO could not find any specific discrepancy or defect in the documentary evidences so furnished by the assessee. Instead, the learned AO, merely on his own surmises and conjectures, without bringing any cogent material on record, disbelieved the loan transactions genuinely carried out by the assessee with various companies and made the addition under s.68 of the Act which was not so warranted. 9.00 Your Honours, without prejudice to the above, now, on the merits of the case, we would be dealing with each and every ingredients of s. 68 of IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 28 of 74 the Income-Tax Act, 1961 in respect of the subject loan creditors in the ensuing paras. 10.00 UNSECURED LOANS FROM COMPANIES CONTROLLED/ MANAGED BY SHRI SHARAD DARAK 10.01 LOAN FROM M/S. JAYANT SECURITY & FINANCE LTD. [‘JSFL’]– Rs.75,40,685/- - A.Y. 2012-13 [AO’s Findings at para (8.53) at page no. 46] [CIT(A)’s Findings at para (4.4.9)[D] at page no. 129 to 132] (A) IDENTITY: (i) The JSFL is a private limited company duly registered under the erstwhile Companies Act, 1956, under the Certificate of Incorporation granted by the Registrar of Companies, Gujarat, on 22-06-1994, vide registration No.L67993GJ1994PLC022313 of 1994-95. A copy of certificate of incorporation of the company is placed at Page No. 152 of our Paper Book. (ii) The JSFL was incorporated with the objects of carrying out the business of trading in various commodities, financing and investment as per the objects contained in its Memorandum of Association, under which it has got incorporated. A copy of the Memorandum and Articles of Association of the company is placed at Page No. 153 to 264 of our Paper Book. (iii) The registered office of the JSFL is presently situated at D/107, Rise Tower I, Bhayali Canal Road, Vadodara, Gujarat. (iv) The JSFL, since its inception, is regularly assessed to income-tax under PAN-AAACJ4848G. The JSFL had also furnished its return of income for the relevant assessment year. In evidence of such fact, a copy of acknowledgement of return of JSFL, for A.Y. 2012-13, is placed at Page No. 265 of our Paper Book. (v) The JSFL is an active and functionary company as per the records and data of the Ministry of Corporate Affairs (MCA), Government of India. In evidence of such fact, a copy of the Master Data downloaded from the official website of the MCA is placed at Page No. 266 of our Paper Book. (vi) The JSFL has been maintaining its bank accounts with various banks. During the relevant previous year, the JSFL was maintaining its current account with Axis Bank at its Branch at Indore vide account No. 043010200064479 and with Indusind Bank at its Branch at Indore vide account No. 200001396931. (vii) The physical identity of the lender company gets established from the fact that an assessment u/s. 143(3) of the Act has got duly framed in the case of the JSFL for the A.Y. 2012-13 by the concerning AO who while carrying out the assessment proceedings at his end, had issued notices to the lender company which were duly served upon such IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 29 of 74 company and in response to such notices, the lender company had also made the necessary compliances. A copy of the Assessment Order passed under s.143(3) of the Act in the case of JSFL for the A.Y. 2012- 13 is placed at Page No. 267 to 269 of our Paper Book. On a perusal of the assessment order, it shall be observed by Your Honours that the learned ACIT-1(1)(2), Baroda has assessed the total income of the aforesaid company derived by it from the business of providing unsecured loans & advances and dealing in shares and securities. (B) GENUINENESS OF THE TRANSACTIONS: (i) As regard the genuineness of the transactions, it is submitted that all the transactions entered into by the assessee with JSFL had taken place through account payee cheques/ banking channels only and none of the transactions had taken place in the form of cash. In evidence of such fact, we are submitting herewith a copy of loan confirmation letter duly signed by the authorized signatory of the lender company, confirming the transactions of loan given by the JSFL to the assessee, is placed at Page No. 270 of our Paper Book. (ii) The assessee’s claim to the effect that all the loan transactions had taken place through banking channels can be verified from the copies of the relevant statements maintained with the banks in which the transactions regarding to receipt of loan by the assessee from JSFL are clearly getting reflected. Copies of abstracts of the relevant bank statements of the assessee are placed at Page No. 271 & 272 of our Paper Book. (iii) Further, to establish the fact that the unsecured loan was genuinely given by JSFL through their bank accounts, a copy of relevant bank statement of JSFL for the relevant period, is placed at Page No. 273 to 277 of our Paper Book. (iv) Furthermore, it is also submitted that the assessee has paid interest on such loans after making necessary TDS which has duly been incorporated by the loan creditor JSFL in its return of income for the relevant assessment year. (v) It shall be pertinent to note that the assessee company has repaid the entire loan of Rs.75,00,000/- to JSFL through banking channel in the immediately succeeding previous year relevant to A.Y. 2013-14. In support of such assertion, a copy of relevant bank statement of the assessee company, is placed at Page No. 278 & 279 of our Paper BookThe repayment of loan by the assessee in the succeeding year itself proves the genuineness of the loan transaction from JSFL. (vi) The genuineness of the loan transaction also gets fortified from a very vital fact that the director of the JSFL namely Shri Sharad Darak, through his Affidavit, duly sworn before Notary Public, has duly affirmed the transaction of loan of Rs.75,00,000/- given by his company JSFL to the assessee company. Shri Sharad Darak, at paras (4) & (7) of the Affidavit, has stated that the subject loan was given by JSFL out of its own funds only. A copy of the Affidavit of Shri Sharad IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 30 of 74 Darak is placed at Page No. 280 to 282 of our Paper Book for A.Y. 2012-13. The Affidavit so furnished by a director of the lender company also establishes the genuineness of the borrowing made by the assessee from JSFL. For such proposition, reliance is placed on the decision of the Hon’ble High Court of Karnataka in the case of Tam Tam Pedda Guruva Reddy vs. JCIT (2007) 291 ITR 44 (Kar.). (C) CREDITWORTHINESS OF JSFL: (i) For establishing capacity and creditworthiness of JSFL to provide loan to the assessee, during the course of the assessment proceedings, the assessee had duly furnished a copy of the audited financial statements of JSFL along with Auditors’ Report, in respect of the financial year ended 31 st March 2012. A copy of such audited financial statements is placed at Page No. 283 to 324 of our Paper Book. (ii) On a perusal of the audited financial statements of JSFL, it shall be observed by Your Honours that as on 31-03-2012 [kindly refer PB Page No. 283 to 324], the JSFL was having its net owned funds to the extent of Rs. 78.12 lakhs by way of share capital and reserves & surplus. (iii) Your Honours, on a perusal of the copy of the bank statement in respect of the bank account maintained by the JSFL [kindly refer PB Page no. 273 to 277], it shall be observed by Your Honours that in such bank statement, entries regarding issuance of cheques for the purpose of providing the subject unsecured loan to the assessee are getting clearly reflected. Such entries by themselves, speak in volume, regarding the identity of the loan creditor, genuineness of the loan transaction and as also, creditworthiness of the loan creditor. (iv) Your Honours, on a further perusal of the bank statement of the JSFL, it would be observed by Your Honours that JSFL was having sufficient balance in its bank statement before providing the subject loan to the assessee. It shall further be observed by Your Honours that such bank balance in its turn had not got accumulated with JSFL by making cash deposits in its bank account. Thus, in such circumstances, the sources of providing loan by JSFL cannot be doubted. (v) Your Honours, the creditworthiness of the JSFL also gets substantiated from the Affidavit of Shri Sharad Darak, director of JSFL, wherein he has stated on oath that the unsecured loan of Rs.75,00,000/- had been given by JSFL out of its own funds only [kindly refer PB Page No. 280 to 282]. (vii) Your Honours, during the course of the appellate proceedings, the assessee had furnished all the necessary documents to establish the identity of the loan creditor, genuineness of the transaction and creditworthiness of the creditor but, despite that, the ld. CIT(A) merely on the basis of assumptions confirmed the action of the ld. AO in making the addition. IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 31 of 74 JUDICIAL PRONOUNCEMENTS BY THE JURISDICTIONAL INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH IN CASE OF CASH CREDITS FROM JSFL: (i) Your Honours, in the similar facts and circumstances, the Hon’ble Jurisdictional ITAT, Indore Bench in the case of M/s. Tirupati Construction, Ujjain vs. DCIT-2(1), Ujjain [ITA No. 522/Ind/2014; Order dated 14-07-2016] has held the transactions of procuring of unsecured loans by the above named assessee from M/s. Jayant Security & Finance Ltd. (JSFL) to be as genuine. The Hon’ble Bench, while upholding the identity of JSFL, has also allowed interest paid on borrowings made from such company. A copy of the said judgment is placed at Page No. 325 to 351 of our Paper Book. (ii) Your Honours, the Hon’ble ITAT, Indore Bench, again, in the case of ACIT vs. Shri Pramod Kumar Sethi (2019) 34 ITJ 39 (Trib.-Indore), by following its earlier decision in the case of ACIT vs. Shri Girish Kumar Sharda (2014) 23 ITJ 701 (Trib.-Indore), vide para 16 & 17 of its Order, has held that the two companies namely 'M/s. Trimurti Finvest Ltd.' and ‘M/s. East West Finvest India Ltd.’ [also belonging to Mr. Sharad Darak] were genuine companies and unsecured loans obtained from these companies cannot be held to be unexplained under s.68 of the Act. A copy of the aforesaid judgment is placed at Page No. 352 to 360 of our Paper Book. In the said decision, the aforesaid two companies were also held by the AO to be accommodation entry provider companies. It is submitted that in the instant case too, the subject creditor company M/s. Jayant Security & Finance Ltd. has been alleged to be an accommodation entry provider company of Shri Sharad Darak. In such circumstances, the ratio laid down by the Hon’ble Jurisdictional Tribunal in the aforesaid case shall be applicable to the case of the assessee company as well. Accordingly, the additions so made by the ld. AO on account of alleged unexplained unsecured loan and disallowance of interest paid thereon deserves to be deleted. (iii) Reliance is also placed on the following judicial pronouncements: i) Shri Rajendra Prasad Agrawal vs. Addl. CIT, Range-1, Indore [ITA No. 327/Ind/2015; Order dated 20-05-2016] ii) M/s. Vajdi Education Society vs. ACIT-2(1), Indore [ITA No. 653/Ind/2013; Order dated 09-02-2018] iii) Chhatrachhaya Nirman Pvt. Ltd. vs. ACIT-2(1), Indore [ITA No. 508/Ind/2018; Order dated 23-01-2020] 10.02 LOAN FROM M/s. JAY JYOTI INDIA PVT. LTD. [‘JJIPL’]– Rs.75,14,178/- A.Y. 2012-13 [Presently Known as M/s. Jayganga Exim India Pvt. Ltd.] [AO’s Findings at para (8.53) at page no. 46] [CIT(A)’s Findings at para (4.4.9)[D] at page no. 129 to 132] (A) IDENTITY: (i) The JJIPL, originally incorporated with the name of “Jay Jyoti India Pvt. Ltd.”, is a private limited company, duly registered under the erstwhile IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 32 of 74 Companies Act, 1956, under the Certificate of Incorporation granted by the Registrar of Companies, Maharashtra, on 06-12-1999 vide Registration No.11-122929 of 1999. Subsequent to the loan transactions carried out by the assessee company, the JJIPL has got its name changed from ‘Jay Jyoti India Pvt. Ltd.’ to ‘Jayganga Exim India Pvt. Ltd.’ having Unique Corporate Identification Number i.e. CIN as U51900WB1999PTC231394. A copy of certificate of incorporation of the company is placed at Page No. 361 & 362 of our Paper Book. (ii) The JJIPL was incorporated with the objects of carrying out the business of trading in various commodities, financing and investment as per the objects contained in its Memorandum of Association, under which it has got incorporated. A copy of the Memorandum and Articles of Association of the company is placed at Page No. 363 to 387 of our Paper Book. (iii) The registered office of the JJIPL, at the relevant time, was situated at 26, Col Biswas Road, Ground Floor, West Side Flat, Kolkata (W.B.). (iv) The JJIPL, since its inception, is regularly assessed to income-tax under PAN-AAACJ8822E. The JJIPL had also furnished its return of income for the relevant assessment year. In evidence of such fact, a copy of acknowledgement of return of JJIPL, for A.Y. 2012-13, is placed at Page No. 388 of our Paper Book. (v) The JJIPL is an active and functionary company as per the records and data of the Ministry of Corporate Affairs (MCA), Government of India. In evidence of such fact, a copy of the Master Data downloaded from the official website of the MCA is placed at Page No. 389 of our Paper Book. (vi) The JJIPL has been maintaining its bank accounts with various banks. During the relevant previous year, the JJIPL was maintaining its current account with Indusind Bank at its Branch at Indore vide account No. 200001124518. (B) GENUINENESS OF THE TRANSACTIONS: (i) As regard the genuineness of the transactions, it is submitted that all the transactions entered into by the assessee with JJIPL had taken place through account payee cheques/ banking channels only and none of the transactions had taken place in the form of cash. In evidence of such fact, we are submitting herewith a copy of loan confirmation letter duly signed by the authorized signatory of the lender company, confirming the transactions of loan given by the JJIPL to the assessee, is placed at Page No. 390 of our Paper Book. (ii) The assessee’s claim to the effect that all the loan transactions had taken place through banking channels can be verified from the copy of the relevant statements maintained with the banks in which the transactions relating to receipt of loan by the assessee from JJIPL are clearly getting reflected. Copies of abstracts of the relevant bank statements of the assessee, is placed at Page No. 391 of our Paper Book. IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 33 of 74 (iii) Further, to establish the fact that the unsecured loan was genuinely given by JJIPL through their bank accounts, a copy of relevant bank statement of JJIPL for the relevant period, is placed at Page No. 392 of our Paper Book. (iv) Furthermore, it is also submitted that the assessee has paid interest on such loans after making necessary TDS which has duly been incorporated by the loan creditor JJIPL in its return of income for the relevant assessment year. (v) It shall be pertinent to note that the assessee company has repaid the entire loan of Rs.75,00,000/- to JJIPL through banking channel in the immediately succeeding previous year relevant to A.Y. 2013-14. In support of such assertion, a copy of relevant bank statement of the assessee company, is placed at Page No. 393 of our Paper Book. The repayment of loan by the assessee in the succeeding year itself proves the genuineness of the loan transaction from JJIPL. (vi) The genuineness of the loan transaction also gets fortified from a very vital fact that the director of the JJIPL namely Shri Sharad Darak, through his Affidavit, duly sworn before Notary Public, has duly affirmed the transaction of loan of Rs.75,00,000/- given by his company JJIPL to the assessee company. Shri Sharad Darak, at paras (4) & (7) of the Affidavit, has stated that the subject loan was given by JJIPL out of its own funds only. A copy of the Affidavit of Shri Sharad Darak is placed at Page No. 394 & 395 of our Paper Book for A.Y. 2012- 13. The Affidavit so furnished by a director of the lender company also establishes the genuineness of the borrowing made by the assessee from JSFL. For such proposition, reliance is placed on the decision of the Hon’ble High Court of Karnataka in the case of Tam Tam Pedda Guruva Reddy vs. JCIT (2007) 291 ITR 44 (Kar.). (C) CREDITWORTHINESS OF JJIPL: (i) For establishing capacity and creditworthiness of JJIPL to provide loan to the assessee, during the course of the assessment proceedings, the assessee had duly furnished a copy of the audited financial statements of JJIPL along with Auditors’ Report, in respect of the financial year ended 31 st March 2012. A copy of such audited financial statements is placed at Page No. 396 to 419 of our Paper Book. (ii) On a perusal of the audited financial statements of JJIPL, it shall be observed by Your Honours that as on 31-03-2012 [kindly refer PB Page No. 396 to 419], the JJIPL was having huge net owned funds to the extent of Rs. 116.07 Crores by way of share capital and reserves & surplus. (iii) Your Honours, on a perusal of the copy of the bank statement in respect of the bank account maintained by the loan creditor, JJIPL [kindly refer PB Page no. 392], it shall be observed by Your Honours that, in such bank statement, entries regarding issuance of cheques for the purpose of providing the subject unsecured loan to the assessee are getting IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 34 of 74 clearly reflected. Such entries by themselves, speak in volume, regarding the identity of the loan creditor, genuineness of the loan transaction and as also, creditworthiness of the loan creditor. (iv) Your Honours, on a further perusal of the bank statement of the JJIPL, it would be observed by Your Honours that JJIPL was having sufficient balance in its bank statement before providing the subject loan to the assessee. It shall further be observed by Your Honours that such bank balance in its turn had not got accumulated with JJIPL by making cash deposits in bank account. Thus, in such circumstances, the sources of providing loan by JJIPL cannot be doubted. (v) Your Honours, the creditworthiness of the also gets substantiated from the Affidavit of Shri Sharad Darak, director of JJIPL, wherein he has stated on oath that the unsecured loan of Rs.75,00,000/- has been given by JJIPL out of its own funds only [kindly refer PB Page No. 394 & 395]. (vi) Your Honours, during the course of the appellate proceedings, the assessee had furnished all the necessary documents to establish the identity of the loan creditor, genuineness of the transaction and creditworthiness of the creditor but, despite that, the ld. CIT(A) merely on the basis of assumptions confirmed the action of the ld. AO in making the addition. 9.01 LOAN FROM M/S. OCTAGON MEDIA MATRIX PVT. LTD. [‘OMMPL’]– Rs.51,12,500/- A.Y. 2014-15 & Rs. 48,30,107/- for A.Y. 2017-18 [Presently Known as ‘Ojasvi Media Matrix Pvt. Ltd.’] [AO’s Findings at para (8.53) at page no. 46] [CIT(A)’s Findings at para (4.4.9)[D] at page no. 129 to 132] (A) IDENTITY: (i) The OMMPL is a private limited company duly registered under the erstwhile Companies Act, 1956, under the Certificate of Incorporation granted by the Registrar of Companies, Gujarat, on 31-07-2009, vide registration No.U22130MH2009PTC194498 of 2009-10. A copy of certificate of incorporation of the company is placed at Page No. 64 & 65 of our Paper Book. (ii) The OMMPL was incorporated with the objects of carrying out the business of advertising or publicity agents, financing and investment as per the objects contained in its Memorandum of Association, under which it has got incorporated. A copy of the Memorandum and Articles of Association of the company is placed at Page No. 66 to 97 of our Paper Book. (iii) The registered office of the OMMPL, at the relevant time, was situated at C-39, Rajnigandha, CH SOC, Ram Mandir Road, Goregaon (W), Near Movie Star Theater, Mumbai (M.H.). Presently, the registered office of OMMPL is situated at GR-76, Harmony Commercial, C-Wing, Near Motilal Nagar, Link Road, Goregaon (W), Mumbai. IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 35 of 74 (iv) The OMMPL, since its inception, is regularly assessed to income-tax under PAN-AABCO1930D. The OMMPL had also furnished its return of income for the relevant assessment year. A copy of the income-tax return of OMMPL for the A.Y. 2014-15 is placed at Page No. 98 of our Paper Book. (v) The OMMPL is an active and functionary company as per the records and data of the Ministry of Corporate Affairs (MCA), Government of India. In evidence of such fact, a copy of the Master Data downloaded from the official website of the MCA is placed at Page No. 99 of our Paper Book. (vi) The OMMPL has been maintaining its bank accounts with various banks. During the relevant previous year, the OMMPL was maintaining its current account with Indusind Bank at its Branch at Mumbai vide account No. 200999044850. (B) GENUINENESS OF THE TRANSACTIONS: (i) As regard the genuineness of the transactions, it is submitted that all the transactions entered into by the assessee with OMMPL had taken place through account payee cheques/ banking channels only and none of the transactions had taken place in the form of cash. In evidence of such fact, we are submitting herewith a copy of loan confirmation letter duly signed by the authorized signatory of the lender company, confirming the transactions of loan given by the OMMPL to the assessee, is placed at Page No. 100 of our Paper Book. (ii) The assessee’s claim to the effect that all the loan transactions had taken place through banking channels can be verified from the copies of the relevant statements maintained with the banks in which the transactions relating to receipt of loan by the assessee from OMMPL are clearly getting reflected. Copies of abstracts of the relevant bank statements of the assessee are placed at Page No. 101 of our Paper Book. (iii) Further, to establish the fact that loans were genuinely given by OMMPL through their bank account, a copy of relevant bank statement of OMMPL for the relevant period is placed at Page No. 102 of our Paper Book. (iv) Furthermore, it is also submitted that the assessee has paid interest on such loans after making necessary TDS which has duly been incorporated by the loan creditor OMMPL in its return of income for the relevant assessment year. (v) The genuineness of the loan transaction also gets fortified from a very vital fact that the director of the OMMPL namely Shri Sharad Darak, through his Affidavit, duly sworn before Notary Public, has duly affirmed the transaction of loan of Rs.50,00,000/- given by his company OMMPL to the assessee company. Shri Sharad Darak, at paras (4) & (7) of the Affidavit, has stated that the subject loan was IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 36 of 74 given by OMMPL out of its own funds only. A copy of the Affidavit of Shri Sharad Darak is placed at Page No. 103 to 105 of our Paper Book]. The Affidavit so furnished by a director of the lender company also establishes the genuineness of the borrowing made by the assessee from JSFL. For such proposition, reliance is placed on the decision of the Hon’ble High Court of Karnataka in the case of Tam Tam Pedda Guruva Reddy vs. JCIT (2007) 291 ITR 44 (Kar.). (C) CREDITWORTHINESS OF OMMPL: (i) For establishing capacity and creditworthiness of OMMPL to provide loan to the assessee, during the course of the assessment proceedings, the assessee had duly furnished a copy of the audited financial statements of OMMPL along with Auditors’ Report, in respect of the financial year ended 31 st March 2014. A copy of such audited financial statements are placed at Page No. 106 to 125 of our Paper Book. (ii) On a perusal of the audited financial statements of OMMPL, it shall be observed by Your Honours that as on 31-03-2014 [kindly refer PB Page No. 106 to 125], the OMMPL was having its net owned funds to the extent of Rs. 2.68 crores by way of share capital and reserves & surplus. (iii) Your Honours, on a perusal of the copy of the bank statement in respect of the bank account maintained by the OMMPL [kindly refer PB Page no. 102], it shall be observed by Your Honours that, in such bank statement, entries regarding issuance of cheques for the purpose of providing the subject unsecured loan to the assessee are getting clearly reflected. Such entries by themselves, speak in volume, regarding the identity of the loan creditor, genuineness of the loan transaction and as also, creditworthiness of the loan creditor. (iv) Your Honours, on a further perusal of the bank statement of the OMMPL, it would be observed by Your Honours that OMMPL was having sufficient balance in its bank statement before providing the subject loan to the assessee. It shall further be observed by Your Honours that such bank balance in its turn had not got accumulated with OMMPL by making cash deposits in bank account. Thus, in such circumstances, the sources of providing loan by OMMPL cannot be doubted (v) Your Honours, the creditworthiness of the OMMPL also gets substantiated from the Affidavit of Shri Sharad Darak, director of OMMPL, wherein he has stated on oath that the unsecured loan of Rs.50,00,000/- has been given by OMMPL out of its own funds only [kindly refer PB Page No. 103 to 105]. (vii) Your Honours, during the course of the appellate proceedings, the assessee had furnished all the necessary documents to establish the identity of the loan creditor, genuineness of the transaction and creditworthiness of the creditor but, despite that, the ld. CIT(A) merely on the basis of assumptions confirmed the action of the ld. AO in making the addition. IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 37 of 74 9.02 LOAN FROM M/S. RAJWADI RETAILS TRADE SYSTEM PVT. LTD. [‘RRTSPL’]–Rs.51,12,500/- A.Y. 2014-15 [Presently Known as ‘3.Rajyeshwar Retail Trade Systems Pvt. Ltd.’] [AO’s Findings at para (8.53) at page no. 46] [CIT(A)’s Findings at para (4.4.9)[D] at page no. 129 to 132] (A) IDENTITY: (i) The RRTSPL is a private limited company duly registered under the erstwhile Companies Act, 1956, under the Certificate of Incorporation granted by the Registrar of Companies, Gujarat, on 07-08-2009, vide registration No.U52190MH2009PTC194744 of 2009-10. A copy of certificate of incorporation of the company is palced at Page No. 126 & 127 of our Paper Book. (ii) The RRTSPL was incorporated with the objects of carrying out the business of trading in various commodities, financing and investment as per the objects contained in its Memorandum of Association, under which it has got incorporated. A copy of the Memorandum and Articles of Association of the company is placed at Page No. 128 to 155 of our Paper Book. (iii) The registered office of the RRTSPL, at the relevant time, was situated at C-39, Rajnigandha, CH SOC, Ram Mandir Road, Goregaon (W), Near Movie Star Theater, Mumbai (M.H.). Presently, the registered office of RRTSPL is situated at GR-76, Harmony Commercial, C-Wing, Near Motilal Nagar, Link Road, Goregaon (W), Mumbai. (iv) The RRTSPL, since its inception, is regularly assessed to income-tax under PAN-AAECR4394M. The RRTSPL had also furnished its return of income for the relevant assessment year. A copy of the income-tax return of RRTSPL for the A.Y. 2014-15 is placed at Page No. 156 of our Paper Book. (v) The RRTSPL is an active and functionary company as per the records and data of the Ministry of Corporate Affairs (MCA), Government of India. In evidence of such fact, a copy of the Master Data downloaded from the official website of the MCA is placed at Page No. 157 of our Paper Book. (vi) The RRTSPL has been maintaining its bank accounts with various banks. During the relevant previous year, the RRTSPL was maintaining its current account with Indusind Bank at its Branch at Mumbai vide account No. 200999046661. (B) GENUINENESS OF THE TRANSACTIONS: (i) As regard the genuineness of the transactions, it is submitted that all the transactions entered into by the assessee with RRTSPL had taken place through account payee cheques/ banking channels only and none of the transactions had taken place in the form of cash. In evidence of such fact, we are submitting herewith a copy of loan confirmation letter IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 38 of 74 duly signed by the authorized signatory of the lender company, confirming the transactions of loan given by the RRTSPL to the assessee, is placed at Page No. 158 of our Paper Book. (ii) The assessee’s claim to the effect that all the loan transactions had taken place through banking channels can be verified from the copy of the relevant statements maintained with the banks in which the transactions relating to receipt of loan by the assessee from RRTSPL are clearly getting reflected. Copies of such abstracts of the relevant bank statements of the assessee are placed at Page No. 159 of our Paper Book. (iii) Further, to establish the fact that loans were genuinely given by RRTSPL through their bank account, a copy of relevant bank statement of RRTSPL for the relevant period is placed at Page No. 160 of our Paper Book. (iv) Furthermore, it is also submitted that the assessee has paid interest on such loan after making necessary TDS which has been duly incorporated by the RRTSPL in its return of income for the relevant assessment year. (v) It shall be pertinent to note that the assessee company has repaid the entire loan of Rs.50,00,000/- to RRTSPL through banking channels in the succeeding previous year relevant to A.Y. 2017-18. In support of such assertion, a copy of relevant bank statement of the assessee company, Page No. 161 to 163 of our Paper Book. The repayment of loan by the assessee in the succeeding year itself proves the genuineness of the loan transaction from RRTSPL. (vi) The genuineness of the loan transaction also gets fortified from a very vital fact that the director of the RRTSPL namely Shri Sharad Darak, through his Affidavit, duly sworn before Notary Public, has duly affirmed the transaction of loan of Rs.50,00,000/- given by his company RRTSPL to the assessee company. Shri Sharad Darak, at paras (4) & (7) of the Affidavit, has stated that the subject loan was given by RRTSPL out of its own funds only. A copy of the Affidavit of Shri Sharad Darak is placed at Page No. 164 to 166 of our Paper Book. The Affidavit so furnished by a director of the lender company also establishes the genuineness of the borrowing made by the assessee from JSFL. For such proposition, reliance is placed on the decision of the Hon’ble High Court of Karnataka in the case of Tam Tam Pedda Guruva Reddy vs. JCIT (2007) 291 ITR 44 (Kar.). (C) CREDITWORTHINESS OF RRTSPL: (i) For establishing capacity and creditworthiness of RRTSPL to provide loan to the assessee, during the course of the assessment proceedings, the assessee had duly furnished a copy of the audited financial statements of RRTSPL along with its Auditors’ Report, in respect of the financial year ended 31 st March 2014. A copy of such audited financial statements is placed at Page No. 167 to 178 of our Paper Book. IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 39 of 74 (ii) On a perusal of the audited financial statements of RRTSPL, it shall be observed by Your Honours that as on 31-03-2014 [kindly refer PB Page No. 167 to 178], the RRTSPL was having its net owned funds to the extent of Rs. 2.25 crores by way of share capital and reserves & surplus. (iii) Your Honours, on a perusal of the copy of the bank statement in respect of the bank account maintained by the RRTSPL [kindly refer PB Page no. 160], it shall be observed by Your Honours that, in such bank statement, entries regarding issuance of cheques for the purpose of providing the subject unsecured loan to the assessee are getting clearly reflected. Such entries by themselves, speak in volume, regarding the identity of the loan creditor, genuineness of the loan transaction and as also, creditworthiness of the loan creditor. (iv) Your Honours, on a further perusal of the bank statement of the RRTSPL, it would be observed by Your Honours that RRTSPL was having sufficient balance in its bank statement before providing the subject loan to the assessee. It shall further be observed by Your Honours that such bank balance in its turn had not got accumulated with RRTSPL by making cash deposits in bank account. Thus, in such circumstances, the sources of providing loan by RRTSPL cannot be doubted (v) Your Honours, the creditworthiness of the RRTSPL also gets substantiated from the Affidavit of Shri Sharad Darak, director of RRTSPL, wherein he has stated on oath that the unsecured loan of Rs.50,00,000/- has been given by RRTSPL out of its own funds only [kindly refer PB Page No. 164 to 166]. (vi) Your Honours, during the course of the appellate proceedings, the assessee had furnished all the necessary documents to establish the identity of the loan creditor, genuineness of the transaction and creditworthiness of the creditor but, despite that, the ld. CIT(A) merely on the basis of assumptions confirmed the action of the ld. AO in making the addition. 9.03 LOAN FROM M/S. RANJIT SECURITIES LTD. [‘RSL’]–Rs.36,44,375/- A.Y. 2014-15 [AO’s Findings at para (8.53) at page no. 46] [CIT(A)’s Findings at para (4.4.9)[D] at page no. 129 to 132] (A) IDENTITY: (i) The RSL is a public limited company duly registered under the erstwhile Companies Act, 1956, under the Certificate of Incorporation granted by the Registrar of Companies, Madhya Pradesh, on 13-09- 1994, vide registration No.L67120MP1994PLC008680 of 1994-95. A copy of certificate of incorporation of the company is placed at Page No. 179 & 180 of our Paper Book. (ii) The RSL was incorporated with the objects of carrying out the business of trading in various securities, financing and investment as per the IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 40 of 74 objects contained in its Memorandum of Association, under which it has got incorporated. A copy of the Memorandum and Articles of Association of the company is placed at Page No. 181 to 229 of our Paper Book. (iii) The registered office of the RSL is presently situated at 317-318, Transport Nagar Scheme No. 44, Indore (M.P). (iv) The RSL, since its inception, is regularly assessed to income-tax under PAN-AABCR4536J. The RSL had also furnished its return of income for the relevant assessment year. In evidence of such fact, a copy of acknowledgement of return of RSL, for A.Y. 2014-15, is placed at Page No. 230 of our Paper Book. (v) The RSL is an active and functionary company as per the records and data of the Ministry of Corporate Affairs (MCA), Government of India. In evidence of such fact, a copy of the Master Data downloaded from the official website of the MCA is placed at Page No. 231 of our Paper Book. (vi) The RSL has been maintaining its bank accounts with various banks. During the relevant previous year, the RSL was maintaining its current account with Bank of Baroda at its Branch at Indore vide account no. 18590200000334. (B) GENUINENESS OF THE TRANSACTIONS: (i) As regard the genuineness of the transactions, it is submitted that all the transactions entered into by the assessee with RSL had taken place through account payee cheques/ banking channels only and none of the transactions had taken place in the form of cash. In evidence of such fact, we are submitting herewith a copy of loan confirmation letter duly signed by the authorized signatory of the lender company, confirming the transactions of loan given by the RSL to the assessee, is placed at Page No. 232 of our Paper Book. (ii) The assessee’s claim to the effect that all the loan transactions had taken place through banking channels can be verified from the copy of the relevant statements maintained with the banks in which the transactions relating to receipt of loan by the assessee from RSL are clearly getting reflected. Copies of abstracts of the relevant bank statements of the assessee are placed at Page No. 233 of our Paper Book. (iii) Further, to establish the fact that loans were genuinely given by RSL through their bank account, a copy of relevant bank statement of RSL for the relevant period is placed at Page No. 234 to 237 of our Paper Book. (v) Furthermore, it is also submitted that the assessee has paid interest on such loans after making necessary TDS which has duly been incorporated by the RSL in its return of income for the relevant assessment year. IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 41 of 74 (vi) It shall be pertinent to note that the assessee company has repaid the entire loan of Rs.35,00,000/- to RSL through banking channels in the succeeding previous year relevant to A.Y. 2016-17. In support of such assertion, a copy of relevant bank statement of the assessee company, is placed at Page No. 238 & 239 of our Paper Book. The repayment of loan by the assessee in the succeeding year itself proves the genuineness of the loan transaction from RSL. (C) CREDITWORTHINESS OF RSL: (i) For establishing capacity and creditworthiness of RSL to provide loan to the assessee, during the course of the assessment proceedings, the assessee had duly furnished a copy of the audited financial statements of RSL along with its Auditors’ Report, in respect of the financial year ended 31 st March 2014. A copy of such audited financial statements is placed at Page No. 240 to 258 of our Paper Book. (ii) On a perusal of the audited financial statements of RSL, it shall be observed by Your Honours that as on 31-03-2014 [kindly refer PB Page No. 240 to 258], the RSL was having its net owned funds to the extent of Rs. 4.95 crores by way of share capital and reserves & surplus. (iii) Your Honours, on a perusal of the copy of the bank statement in respect of the bank account maintained by the loan creditor, RSL [kindly refer PB Page no. 234 to 237], it shall be observed by Your Honours that, in such bank statement, entries regarding issuance of cheques for the purpose of providing the subject unsecured loan to the assessee are getting clearly reflected. Such entries by themselves, speak in volume, regarding the identity of the loan creditor, genuineness of the loan transaction and as also, creditworthiness of the loan creditor. (iv) Your Honours, on a further perusal of the bank statement of the RSL, it would be observed by Your Honours that RSL was having sufficient balance in its bank statement before providing the subject loan to the assessee. It shall further be observed by Your Honours that such bank balance in its turn had not got accumulated with RSL by making cash deposits in bank account. Thus, in such circumstances, the sources of providing loan by RSL cannot be doubted (v) Your Honours, during the course of the appellate proceedings, the assessee had furnished all the necessary documents to establish the identity of the loan creditor, genuineness of the transaction and creditworthiness of the creditor but, despite that, the ld. CIT(A) merely on the basis of assumptions confirmed the action of the ld. AO in making the addition. 9.04 LOAN FROM M/S. SUZLON SECURITIES PVT. LTD. [‘SSPL’]– Rs.51,12,500/- A.Y. 2014-15 [Presently Known as ‘Salween Securities Pvt. Ltd.’] [AO’s Findings at para (8.53) at page no. 46] [CIT(A)’s Findings at para (4.4.9)[D] at page no. 129 to 132] (A) IDENTITY: IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 42 of 74 (i) The SSPL is a private limited company duly registered under the erstwhile Companies Act, 1956, under the Certificate of Incorporation granted by the Registrar of Companies, Maharashtra, on 22-09-2009, vide registration No.U67100MH2009PTC195932 of 2009-10. The name of the SSPL has now been changed in the records of the Ministry of Corporate Affairs as ‘Salween Securities Pvt. Ltd.’. A copy of certificate of incorporation of the company is placed at Page No. 259 & 260 of our Paper Book. (ii) The SSPL was incorporated with the objects of carrying out the business of trading in various securities, financing and investment as per the objects contained in its Memorandum of Association, under which it has got incorporated. A copy of the Memorandum and Articles of Association of the company is placed at Page No. 261 to 287 of our Paper Book. (iii) The registered office of the SSPL is presently situated at GR-76, Harmony Commercial, C-Wing, Near Motilal Nagar, Link Road, Goregaon (West), Mumbai, (MH.). (iv) The SSPL, since its inception, is regularly assessed to income-tax under PAN-AANCS5746H. The SSPL had also furnished its return of income for the relevant assessment year. A copy of the income-tax return of SSPL for the A.Y. 2014-15 is placed at Page No. 288 of our Paper Book. (v) The SSPL is an active and functionary company as per the records and data of the Ministry of Corporate Affairs (MCA), Government of India. In evidence of such fact, a copy of the Master Data downloaded from the official website of the MCA is placed at Page No. 289 of our Paper Book. (vi) The SSPL has been maintaining its bank accounts with various banks. During the relevant previous year, the SSPL was maintaining its current account with Indusind Banik at its Branch at Mumbai vide account No 200999043730. (B) GENUINENESS OF THE TRANSACTIONS: (i) As regard the genuineness of the transactions, it is submitted that all the transactions entered into by the assessee with SSPL had taken place through account payee cheques/ banking channels only and none of the transactions had taken place in the form of cash. In evidence of such fact, we are submitting herewith a copy of loan confirmation letter duly signed by the authorized signatory of the lender company, confirming the transactions of loan given by the SSPL to the assessee, is placed at Page No. 290 of our Paper Book. (ii) The assessee’s claim to the effect that all the loan transactions had taken place through banking channels can be verified from the copy of the relevant statements maintained with the banks in which the transactions relating to receipt of loan by the assessee from SSPL are clearly getting reflected. Copies of abstracts of the relevant bank IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 43 of 74 statements of the assessee are placed at Page No. 291 of our Paper Book. (iii) Further, to establish the fact that loans were genuinely given by SSPL through their bank account, a copy of relevant bank statement of SSPL for the relevant period is placed at Page No. 292 of our Paper Book. (iv) Furthermore, it is also submitted that the assessee has paid interest on such loans after making necessary TDS which has duly been incorporated by the SSPL in its return of income for the relevant assessment year. (v) The genuineness of the loan transaction also gets fortified from a very vital fact that the director of the SSPL namely Shri Sharad Darak, through his Affidavit, duly sworn before Notary Public, has duly affirmed the transaction of loan of Rs.50,00,000/- given by his company SSPL to the assessee company. Shri Sharad Darak, at paras (4) & (7) of the Affidavit, has stated that the subject loan was given by SSPL out of its own funds only. A copy of the Affidavit of Shri Sharad Darak is placed at Page No. 293 to 295 of our Paper Book]. The Affidavit so furnished by a director of the lender company also establishes the genuineness of the borrowing made by the assessee from JSFL. For such proposition, reliance is placed on the decision of the Hon’ble High Court of Karnataka in the case of Tam Tam Pedda Guruva Reddy vs. JCIT (2007) 291 ITR 44 (Kar.). (C) CREDITWORTHINESS OF SSPL: (i) For establishing capacity and creditworthiness of SSPL to provide loan to the assessee, during the course of the assessment proceedings, the assessee had duly furnished a copy of the audited financial statements of SSPL along with its Auditors’ Report, in respect of the financial year ended 31 st March 2014. A copy of such audited financial statements is placed at Page No. 296 to 314 of our Paper Book. (ii) On a perusal of the audited financial statements of SSPL, it shall be observed by Your Honours that as on 31-03-2014 [kindly refer PB Page No. 296 to 314], the SSPL was having its net owned funds to the extent of Rs. 3.74 crores by way of share capital and reserves & surplus. (iii) Your Honours, on a perusal of the copy of the bank statement in respect of the bank account maintained by the loan creditor, SSPL [kindly refer PB Page no. 292], it shall be observed by Your Honours that, in such bank statement, entries regarding issuance of cheques for the purpose of providing the subject unsecured loan to the assessee are getting clearly reflected. Such entries by themselves, speak in volume, regarding the identity of the loan creditor, genuineness of the loan transaction and as also, creditworthiness of the loan creditor. (iv) Your Honours, on a further perusal of the bank statement of the SSPL, it would be observed by Your Honours that SSPL was having sufficient balance in its bank statement before providing the subject loan to the assessee. It shall further be observed by Your Honours that such bank IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 44 of 74 balance in its turn had not got accumulated with SSPL by making cash deposits in bank account. Thus, in such circumstances, the sources of providing loan by SSPL cannot be doubted (v) Your Honours, the creditworthiness of the SSPL also gets substantiated from the Affidavit of Shri Sharad Darak, director of SSPL, wherein he has stated on oath that the unsecured loan of Rs.50,00,000/- has been given by SSPL out of its own funds only [kindly refer PB Page No. 293 to 295]. (vi) Your Honours, during the course of the appellate proceedings, the assessee had furnished all the necessary documents to establish the identity of the loan creditor, genuineness of the transaction and creditworthiness of the creditor but, despite that, the ld. CIT(A) merely on the basis of assumptions confirmed the action of the ld. AO in making the addition. 6.01 LOAN FROM M/S. EAST WEST FINVEST INDIA LTD. [‘EWFIL’]– Rs.3,26,630/- A.Y. 2016-17 & Rs. 18,62,270/- for A.Y. 2017-8 [AO’s Findings at para (8.53) at page no. 46] [CIT(A)’s Findings at para (4.4.9)[D] at page no. 129 to 132] (A) IDENTITY: (i) The EWFIL is a private limited company duly registered under the erstwhile Companies Act, 1956, under the Certificate of Incorporation granted by the Registrar of Companies, Madhya Pradesh, on 01-04- 1999, vide registration No.U65921CT1999PLC020108 of 1999-00. A copy of certificate of incorporation of the company is placed at Page No. 69 of our Paper Book. (ii) The EWFIL was incorporated with the objects of carrying out the business of trading in various commodities, financing and investment as per the objects contained in its Memorandum of Association, under which it has got incorporated. A copy of the Memorandum and Articles of Association of the company is placed at Page No. 70 to 126 of our Paper Book. (iii) The registered office of the EWFIL is presently situated at Sanjay Heights in front of Rajaswa Colony, Flat No. A/102, Sarkanda, Bilaspur (CT) - 495001. (iv) The EWFIL, since its inception, is regularly assessed to income-tax under PAN-AADCE1236G. The EWFIL had also furnished its return of income for the relevant assessment year. In evidence of such fact, we are furnishing herewith a copy of acknowledgement of return of EWFIL, for A.Y. 2016-17, is placed at Page No. 127 of our Paper Book. (v) The EWFIL is an active and functionary company as per the records and data of the Ministry of Corporate Affairs (MCA), Government of India. In evidence of such fact, a copy of the Master Data downloaded from the official website of the MCA is placed at Page No. 128 of our Paper Book. IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 45 of 74 (vi) The EWFIL has been maintaining its bank accounts with various banks. During the relevant previous year, the EWFIL was maintaining its current account with Indusind Bank at its Branch at Indore vide account No. 200007892305. (B) GENUINENESS OF THE TRANSACTIONS: (i) As regard the genuineness of the transactions, it is submitted that all the transactions entered into by the assessee with EWFIL had taken place through account payee cheques/ banking channels only and none of the transactions had taken place in the form of cash. In evidence of such fact, we are submitting herewith a copy of loan confirmation letter duly signed by the authorized signatory of the lender company, confirming the transactions of loan given by the EWFIL to the assessee, is placed at Page No. 129 of our Paper Book. (ii) The assessee’s claim to the effect that all the loan transactions had taken place through banking channels can be verified from the copy of the relevant statements maintained with the banks in which the transactions relating to receipt of loan by the assessee from EWFIL are clearly getting reflected. Copies of abstracts of the relevant bank statements of the assessee are placed at Page No.130 of our Paper Book. (iii) Further, to establish the fact that loans were genuinely given by EWFIL through their bank account, a copy of relevant bank statement of EWFIL for the relevant period is placed at Page No.131 of our Paper Book. (iv) Furthermore, it is also submitted that the assessee has paid interest on such loans after making necessary TDS which has duly been incorporated by the EWFIL in its return of income for the relevant assessment year. (v) It shall be pertinent to note that the assessee company has repaid the entire loan of Rs.3,00,000/- to EWFIL through banking channels in the immediately succeeding previous year relevant to A.Y. 2017-18. In support of such assertion, we are furnishing herewith a copy of relevant bank statement of the assessee company, is placed at Page No. 132 of our Paper Book. The repayment of loan by the assessee in the succeeding year itself proves the genuineness of the loan transaction from EWFIL. (vi) The genuineness of the loan transaction also gets fortified from a very vital fact that the director of the EWFIL namely Shri Sharad Darak, through his Affidavit, duly sworn before Notary Public, has duly affirmed the transaction of loan of Rs.3,00,000/- given by his company EWFIL to the assessee company. Shri Sharad Darak, at paras (4) & (7) of the Affidavit, has stated that the subject loan was given by EWFIL out of its own funds only. A copy of the Affidavit of Shri Sharad Darak is placed at Page No. 133 to 135 of our Paper Book. The Affidavit so furnished by a director of the lender company also establishes the genuineness of the borrowing made by the assessee from JSFL. For IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 46 of 74 such proposition, reliance is placed on the decision of the Hon’ble High Court of Karnataka in the case of Tam Tam Pedda Guruva Reddy vs. JCIT (2007) 291 ITR 44 (Kar.). (C) CREDITWORTHINESS OF EWFIL: (i) For establishing capacity and creditworthiness of EWFIL to provide loan to the assessee, during the course of the assessment proceedings, the assessee had duly furnished a copy of the audited financial statements of EWFIL along with Auditors’ Report, in respect of the financial year ended 31 st March 2016. A copy of such audited financial statements is placed at Page No. 136 to 166 of our Paper Book. (ii) On a perusal of the audited financial statements of EWFIL, it shall be observed by Your Honours that as on 31-03-2016 [kindly refer PB Page No. 136 to 166], the EWFIL was having its net owned funds to the extent of Rs. 241.94 crores by way of share capital and reserves & surplus. (iii) Your Honours, on a perusal of the copy of the bank statement in respect of the bank account maintained by the EWFIL [kindly refer PB Page no. 131], it shall be observed by Your Honours that in such bank statement, entries regarding issuance of cheques for the purpose of providing the subject unsecured loan to the assessee are getting clearly reflected. Such entries by themselves, speak itself in volume, regarding the identity of the loan creditor, genuineness of the loan transaction and as also, creditworthiness of the loan creditor. (iv) Your Honours, on a further perusal of the bank statement of the EWFIL, it would be observed by Your Honours that EWFIL was having sufficient balance in its bank statement before providing the subject loan to the assessee. It shall further be observed by Your Honours that such bank balance in its turn had not got accumulated with EWFIL by making cash deposits in bank account. Thus, in such circumstances, the sources of providing loan by EWFIL cannot be doubted (v) Your Honours, the creditworthiness of the EWFIL also gets substantiated from the Affidavit of Shri Sharad Darak, director of EWFIL, wherein he has stated on oath that the unsecured loan of Rs.3,00,000/- has been given by EWFIL out of its own funds only [kindly refer PB Page No. 133 to 135]. JUDICIAL PRONOUNCEMENTS BY THE JURISDICTIONAL INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH IN CASE OF CASH CREDITS FROM EWFIL: (i) Your Honours, in the similar facts and circumstances, the Hon’ble Jurisdictional ITAT, Indore Bench in the case of M/s. Tirupati Construction, Ujjain vs. DCIT-2(1), Ujjain [ITA No. 522/Ind/2014; Order dated 14-07-2016] has held the transactions of procuring of unsecured loans by the above named assessee from M/s. East West Finvest India Ltd. (EWFIL) to be as genuine. The Hon’ble Bench, while upholding the identity of EWFIL, has also allowed interest paid on borrowings made IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 47 of 74 from such company. A copy of the said judgment is placed at Page No. 167 to 193 of our Paper Book. (ii) Your Honours, the Hon’ble ITAT, Indore Bench, again, in the case of ACIT vs. Shri Pramod Kumar Sethi (2019) 34 ITJ 39 (Trib.-Indore), by following its earlier decision in the case of ACIT vs. Shri Girish Kumar Sharda (2014) 23 ITJ 701 (Trib.-Indore), vide para 16 & 17 of its Order, has held that the two companies namely 'M/s. Trimurti Finvest Ltd.' and ‘M/s. East West Finvest India Ltd.’ [also belonging to Mr. Sharad Darak] were genuine companies and unsecured loans obtained from these companies cannot be held to be unexplained under s.68 of the Act. A copy of the aforesaid judgment is placed at Page No. 194 to 202 of our Paper Book. In the said decision, the aforesaid two companies were also held by the AO to be accommodation entry provider companies. It is submitted that in the instant case too, the subject creditor company M/s. East West Finvest India Ltd. has been alleged to be an accommodation entry provider company of Shri Sharad Darak. In such circumstances, the ratio laid down by the Hon’ble Jurisdictional Tribunal in the aforesaid case shall be applicable to the case of the assessee company as well. Accordingly, the additions so made by the ld. AO on account of alleged unexplained unsecured loan and disallowance of interest paid thereon deserves to be deleted. (iii) Reliance is also placed on the following judicial pronouncements: i) Shri Rajendra Prasad Agrawal vs. Addl. CIT, Range-1, Indore [ITA No. 327/Ind/2015; Order dated 20-05-2016] ii) M/s. Vajdi Education Society vs. ACIT-2(1), Indore [ITA No. 653/Ind/2013; Order dated 09-02-2018] iii) Chhatrachhaya Nirman Pvt. Ltd. vs. ACIT-2(1), Indore [ITA No. 508/Ind/2018; Order dated 23-01-2020] (vi) Your Honours, during the course of the appellate proceedings, the assessee had furnished all the necessary documents to establish the identity of the loan creditor, genuineness of the transaction and creditworthiness of the creditor but, despite that, the ld. CIT(A) merely on the basis of assumptions confirmed the action of the ld. AO in making the addition. 6.04 LOAN FROM M/S. ZYKA MERCHANDISE PVT. LTD. [‘ZMPL’]– Rs.10,17,260/- A.Y. 2017-18 [AO’s Findings at para (8.53) at page no. 46] [CIT(A)’s Findings at para (4.4.9)[D] at page no. 129 to 132] (A) IDENTITY: (i) The ZMPL is a private limited company duly registered under the erstwhile Companies Act, 1956, under the Certificate of Incorporation granted by the Registrar of Companies, Madhya Pradesh, on 01-04- 1999, vide registration No.U74990MH2009PTC194746 of 2009-10. A copy of certificate of incorporation of the company is placed at Page No. 248 & 249 of our Paper Book. IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 48 of 74 (ii) The ZMPL was incorporated with the objects of carrying out the business of trading in various commodities, financing and investment as per the objects contained in its Memorandum of Association, under which it has got incorporated. A copy of the Memorandum and Articles of Association of the company is placed at Page No. 250 to 277 of our Paper Book. (iii) The registered office of the ZMPL is presently situated at GR-76, Harmony Commercial, C-Wing Near Motilal Nagar, Link Road, Goregaon (West), Mumbai (M.H.). (iv) The ZMPL, since its inception, is regularly assessed to income-tax under PAN-AAACZ3842Q. The ZMPL had also furnished its return of income for the relevant assessment year. In evidence of such fact, a copy of acknowledgement of return of ZMPL, for A.Y. 2017-18, is placed at Page No. 278 of our Paper Book. (v) The ZMPL is an active and functionary company as per the records and data of the Ministry of Corporate Affairs (MCA), Government of India. In evidence of such fact, a copy of the Master Data downloaded from the official website of the MCA is placed at Page No. 279 of our Paper Book. (vi) The ZMPL has been maintaining its bank accounts with various banks. During the relevant previous year, the ZMPL was maintaining its current account with Indusind Bank at its Branch at Mumbai vide account No. 200999050936. (B) GENUINENESS OF THE TRANSACTIONS: (i) As regard the genuineness of the transactions, it is submitted that all the transactions entered into by the assessee with ZMPL had taken place through account payee cheques/ banking channels only and none of the transactions had taken place in the form of cash. In evidence of such fact, we are submitting herewith a copy of loan confirmation letter duly signed by the authorized signatory of the lender company, confirming the transactions of loan given by the ZMPL to the assessee, is placed at Page No. 280 of our Paper Book. (ii) The assessee’s claim to the effect that all the loan transactions had taken place through banking channels can be verified from the copies of the relevant statements maintained with the banks in which the transactions relating to receipt of loan by the assessee from ZMPL are clearly getting reflected. Copies of abstracts of the relevant bank statements of the assessee are placed at Page No. 281 of our Paper Book. (iii) Further, to establish the fact that loans were genuinely given by ZMPL through their bank account, a copy of relevant bank statement of ZMPL for the relevant period is placed at Page No.282 of our Paper Book. (iv) Furthermore, it is also submitted that the assessee has paid interest on such loans after making necessary TDS which has duly been IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 49 of 74 incorporated by the ZMPL in its return of income for the relevant assessment year. (v) The genuineness of the loan transaction also gets fortified from a very vital fact that the director of the ZMPL namely Shri Sharad Darak, through his Affidavit, duly sworn before Notary Public, has duly affirmed the transaction of loan of Rs.10,00,000/- given by his company ZMPL to the assessee company. Shri Sharad Darak, at paras (4) & (7) of the Affidavit, has stated that the subject loan was given by ZMPL out of its own funds only. A copy of the Affidavit of Shri Sharad Darak is placed at Page No. 283 to 284 of our Paper Book. The Affidavit so furnished by a director of the lender company also establishes the genuineness of the borrowing made by the assessee from JSFL. For such proposition, reliance is placed on the decision of the Hon’ble High Court of Karnataka in the case of Tam Tam Pedda Guruva Reddy vs. JCIT (2007) 291 ITR 44 (Kar.). (C) CREDITWORTHINESS OF ZMPL: (i) For establishing capacity and creditworthiness of ZMPL to provide loan to the assessee, during the course of the assessment proceedings, the assessee had duly furnished a copy of the audited financial statements of ZMPL along with Auditors’ Report, in respect of the financial year ended 31 st March 2017. A copy of such audited financial statements is placed at Page No. 285 to 302 of our Paper Book. (ii) On a perusal of the audited financial statements of ZMPL, it shall be observed by Your Honours that as on 31-03-2017 [kindly refer PB Page No. 285 to 302], the ZMPL was having its net owned funds to the extent of Rs. 2.56 crores by way of share capital and reserves & surplus. (iii) Your Honours, on a perusal of the copy of the bank statement in respect of the bank account maintained by the ZMPL [kindly refer PB Page no. 282], it shall be observed by Your Honours that, in such bank statement, entries regarding issuance of cheques for the purpose of providing the subject unsecured loan to the assessee are getting clearly reflected. Such entries by themselves, speak in volume, regarding the identity of the loan creditor, genuineness of the loan transaction and as also, creditworthiness of the loan creditor. (iv) Your Honours, on a further perusal of the bank statement of the ZMPL, it would be observed by Your Honours that ZMPL was having sufficient balance in its bank statement before providing the subject loan to the assessee. It shall further be observed by Your Honours that such bank balance in its turn had not got accumulated with ZMPL by making cash deposits in bank account. Thus, in such circumstances, the sources of providing loan by ZMPL cannot be doubted. (v) Your Honours, the creditworthiness of the ZMPL also gets substantiated from the Affidavit of Shri Sharad Darak, director of ZMPL, wherein he has stated on oath that the unsecured loan of Rs.10,00,000/- has been given by ZMPL out of its own funds only [kindly refer PB Page No. 283 & 284]. IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 50 of 74 (vi) Your Honours, during the course of the appellate proceedings, the assessee had furnished all the necessary documents to establish the identity of the loan creditor, genuineness of the transaction and creditworthiness of the creditor but, despite that, the ld. CIT(A) merely on the basis of assumptions confirmed the action of the ld. AO in making the addition. 12. 00 Your Honours, the Hon’ble Coordinate ‘G’ Bench of Mumbai, in the case of JCIT vs.Shalimar Housing and Finance Limited vide its recent pronouncement on 1-06-2021 in Appeal No. ITA 4079/Mum/2019 for A.Y. 2013-14 was pleased to hold the genuineness of the loan transactions carried out by the assessee in that case with various companies of Shri Sharad Darak. 12.00 Your Honours, during the course of the search proceedings carried out under s.132(1) of the Act in the various business premises of the assessee company and as also, in the residential premises of the directors of the assessee company, no incriminating document or data was found or recovered from the assessee company which could have given an iota of indulgement of the assessee in procuring any accommodation entries from anyone. It is submitted that in the body of the assessment order, at para (8.10) on page no. 11, the learned AO has made reference of some excel sheets which were allegedly found from the computer system of some Mr. Anuj Agrawal, Company Secretary. It is submitted that first of all, such datas were not recovered from any of the authorized persons of the assessee company and secondly, from the subject excel sheets, no adverse inference against the assessee company can be drawn. 12.01 Your Honours, in the case of the assessee, the learned AO has proceeded with his pre-conceived notions only and it was therefore, at various places in the body of the assessment order, he has leveled the charge of accommodation entry provider on Mr. Sharad Darak and has further alleged the assessee company to have procured accommodation entries and not the genuine loans from the companies controlled by the above named Shri Sharad Darak. However, for leveling such a serious charge, the learned AO has relied solely on the hearsays without bringing any single evidence on record. 12.02 Your Honours, at para (8.14) of the Order, the learned AO has alleged that during the assessment proceedings, search and survey actions of the Income Tax Department, it has come to the light that Shri Sharad Darak is a full time entry provider. However, the learned AO has not given the basis of such assumption. 12.03 Your Honours, the learned AO, at paras (8.15) & (8.16) of the assessment order, has made a reference of some survey proceedings u/s. 133A carried out in the business premises of some of the companies namely M/s. East West Finvest Pvt. Ltd., M/s. Purvi Finvest Ltd. and M/s. Trimurti Finvest Ltd., having a common address at Kamla Hari Villa, Besides Apollo Pharmacy, Main Road, Vidhya Nagar, Bilaspur, allegedly controlled by Shri Sharad Darak. At para (8.16), the IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 51 of 74 learned AO has made a reference of some statement given by some Mr. Dinesh Agrawal, Auditor of the companies controlled by Shri Sharad Darak, who was found the occupant of the premises where the survey proceedings were carried out. The learned AO has also given the gist of the statement given by such Mr. Dinesh Agrawal. In this regard, at the outset, it is submitted that during the previous year under consideration, the assessee had not carried out any loan transaction with any of the companies in respect of which the above said survey proceedings were allegedly carried out. Secondly, it shall be appreciated that Mr. Dinesh Agrawal whose statements have been referred to by the learned AO had not admitted that the companies run by Mr. Sharad Darak were accommodation entry provider companies. In any case, during the course of the survey proceedings referred to by the learned AO, not a single evidence was found which could have put the slightest doubt on the various financial transactions carried out by the assessee with the so-called Sharad Darak’s controlled companies. 12.04 Your Honours, at para (8.17), the learned AO has made a reference of some statement, allegedly given by Shri Sharad Darak, on 21-02-2014, under s.131 of the Act, in some other proceedings not related to the assessee or any of its associates. In this regard, at the outset, it is submitted that such statement of Shri Sharad Darak, given way back in the year 2014 and that too, in some other proceedings not related to the assessee, has no evidentiary value. Even otherwise, the copy of the statement of Shri Sharad Darak so referred to by the learned AO was never provided to the assessee. Further, even from the gist of the statement of Shri Sharad Darak, as mentioned by the learned AO in the aforesaid para, it cannot be inferred that the loans genuinely borrowed by the assessee company were not the genuine loans. It is submitted that Mr. Sharad Darak has given an Affidavit to the effect that his companies had genuinely given loans to the assessee company. It is further submitted that the affidavit so given, in the case of the assessee company, would supercede the alleged statement of Shri Sharad Darak given at some different point of time and in some different proceedings, the outcome whereof have not been disclosed to the assessee. 12.05 Your Honours, at the cost of the repetition, it is submitted that in the instant case, neither the learned AO himself nor even the officios of the Investigation Wing has not conducted any independent enquiry from Shri Sharad Darak, to unearth the truthfulness of the loan transactions claimed to have been carried out by the assessee, in various assessment years, with the various companies controlled by such Sharad Darak. The learned AO has completely harped upon the non- credible borrowed information and that too, without confronting the basis of such information to the assessee. 12.06 Your Honours, without prejudice to the above, it is submitted that if the claim of the learned AO is accepted that some survey in the business premises of the lender companies were carried out under s.133A of the Act and further, the statements of auditors/ directors were recorded either during the course of such survey or under s.131 of the Act, then, the identity of the lender companies cannot be doubted for the reason that without there being existence of any such company or directors IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 52 of 74 thereof, there could not have been any occasion for the Department to conduct the survey and to record the statements. 13.00 Your Honours, without prejudice to the above, it is submitted that learned AO has made the impugned addition merely on the basis of some information available with him as regard to the loan creditors allegedly gathered behind the back of the assessee in the cases of some other assesses. The learned AO in the Assessment Order has referred to the statements of Shri Dinesh Agrawal and Shri Sharad Darak. But while doing so, the learned AO committed gross violation of principles of natural law and justice, firstly, by not confronting the assessee with the copies of all statements, documents and materials which he was intending to use against the assessee and secondly, by not affording any opportunity of cross examination to the assessee of the persons on whose statements the learned AO placed the reliance. In such circumstances, in view of the settled judicial position, the learned AO was not justified in drawing any adverse inference against the assessee merely on the basis of evidences collected behind his back. 13.01 Your Honours, on the issue of cross-examination, the Hon’ble Supreme Court in the case of M/s. Kishinchand Chellaram vs. CIT (1980) 125 ITR 713 (SC) was pleased to hold that the assessing officer is duty bound to confront the material collected by him to the assessee. The Hon’ble Supreme Court again in the case of M/s. Andaman Timber Industries V/s. Commissioner of Central Excise, Kolkatta-II 2016 (15) SCC 785 (SC) was pleased to hold as under: “5. According to us, not allowing the Assessee to cross examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the Assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the Assessee disputed the correctness of the statements and wanted to cross examine, the Adjudicating Authority did not grant this opportunity to the Assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the Assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that cross examination of the said dealers could not have brought out any material which would not be in possession of the Assessee themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the Assessee wanted to cross-examine those dealers and what extraction the Assessee wanted from them. 6. As mentioned above, the Assessee had contested the truthfulness of the statements of these two witnesses and IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 53 of 74 wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross-examination. That apart, the Adjudicating Authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list itself could be the subject matter of cross-examination. Therefore, it was not for the Adjudicating Authority to presuppose as to what could be the subject matter of the cross examination and make the remarks as mentioned above. We may also point out that on an earlier occasion when the matter came before this Court in Civil Appeal No. 2216 of 2000, order dated 17-3-2005 [2005 (187) E.L.T. A33 (S.C.)] was passed remitting the case back to the Tribunal with the directions to decide the appeal on merits giving its reasons for accepting or rejecting the submissions. 7. In view the above, we are of the opinion that if the testimony of these two witnesses is discredited, there was no material with the Department on the basis of which it could justify its action, as the statement of the aforesaid two witnesses was the only basis of issuing the show cause notice.” 13.02 The Hon’ble Supreme Court, again, in the case of Ayaaubkhan Noorkhan Pathan vs. The State of Maharashtra and Ors., 2013 AIR 58 (SC) was pleased to hold as under: “23. A Constitution Bench of this Court in State of M.P. v. Chintaman Sadashiva Vaishampayan AIR 1961 SC 1623, held that the rules of natural justice, require that a party must be given the opportunity to adduce all relevant evidence upon which he relies, and further that, the evidence of the opposite party should be taken in his presence, and that he should be given the opportunity of cross-examining the witnesses examined by that party. Not providing the said opportunity to cross-examine witnesses, would violate the principles of natural justice. (See also: Union of India v. T.R. Varma, AIR 1957 SC 882; Meenglas Tea Estate v. Workmen, AIR 1963 SC 1719; M/s. Kesoram Cotton Mills Ltd. v. Gangadhar and Ors. ,AIR 1964 SC 708; New India Assurance Co. Ltd. v. Nusli Neville Wadia and Anr. AIR 2008 SC 876; Rachpal Singh and Ors. v. Gurmit Singh and Ors.AIR 2009 SC 2448; Biecco Lawrie and Anr. v. State of West Bengal and Anr. AIR 2010 SC 142; and State of Uttar Pradesh v. Saroj Kumar Sinha AIR 2010 SC 3131). 24. In Lakshman Exports Ltd. v. Collector of Central Excise (2005) 10 SCC 634, this Court, while dealing with a case under the Central Excise Act, 1944, considered a similar issue i.e. permission with respect to the cross-examination of a witness. In the said case, the Assessee had specifically asked to be allowed to cross-examine the representatives of the firms concern, to establish that the goods in question had been accounted for in their books of accounts, and that excise duty had been paid. The Court held that such a request could not be turned down, as the IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 54 of 74 denial of the right to cross-examine, would amount to a denial of the right to be heard i.e. audi alteram partem. 28. The meaning of providing a reasonable opportunity to show cause against an action proposed to be taken by the government, is that the government servant is afforded a reasonable opportunity to defend himself against the charges, on the basis of which an inquiry is held. The government servant should be given an opportunity to deny his guilt and establish his innocence. He can do so only when he is told what the charges against him are. He can therefore, do so by cross- examining the witnesses produced against him. The object of supplying statements is that, the government servant will be able to refer to the previous statements of the witnesses proposed to be examined against him. Unless the said statements are provided to the government servant, he will not be able to conduct an effective and useful cross examination. 29. In Rajiv Arora v. Union of India and Ors. AIR 2009 SC 1100, this Court held: 30. The aforesaid discussion makes it evident that, not only should the opportunity of cross-examination be made available, but it should be one of effective cross examination, so as to meet the requirement of the principles of natural justice. In the absence of such an opportunity, it cannot be held that the matter has been decided in accordance with law, as cross-examination is an integral part and parcel of the principles of natural justice.” [Emphasis supplied] 13.03 The Hon’ble Gujarat High Court in the case of the Principal Commissioner of Income Tax Ahmedabad and Ors. vs. Kanubhai Maganlal Patel 2017 (3) TMI 271 (Guj.) 13.04 The Hon’ble Gujarat High Court, again, in the case of the Commissioner of Income Tax-V vs. Indrajit Singh Suri 2013 (8) TMI 111 (Guj.) 13.05 The Hon’ble Gujarat High Court, again, in the case of the CIT vs. Supertech Diamond Tools Pvt. Ltd. 2013 (12) TMI 1529 (Guj.) 13.06 The Hon’ble Delhi High Court in the case of the Commissioner of Income Tax vs. Ashwani Gupta (2010) 322 ITR 396 (Del.) 13.07 The Hon’ble Gujarat High Court in the case of the ACIT vs. Govindbhai N. Patel 2013 (8) TMI 239 (Guj.) 13.08 The Hon’ble Delhi High Court in the case of the CIT vs.. (2007) 295 ITR 105 (Del.) has held as under: “However, AO paid no heed to such request and proceeded with assessment order- Whether since correctness or otherwise of report, on basis of which assessment order was passed against assessee, was itself under challenge, said repost could not be automatically accepted and Assessing Officer committed violation of principles of natural justice in not permitting cross- IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 55 of 74 examination of analyst and relying upon his report to detriment of assessee-Held, yes.” 13.09 The Hon’ble Delhi High Court, again, in the case of the CIT vs. S.M.Aggarwal (2007) 293 ITR 43 (Del.) 13.10 The Hon’ble Bombay High Court in the case of the CIT-13 Vs. M/s. Ashish International 2011 (2) TMI 1506 (Bom.) has held as under: “The Tribunal has recorded a finding of fact that the assessee had disputed the correctness of the above statement and admittedly the assessee was not given any opportunity to cross examine the concerned Director of M/s. Thakkar Agro Industrial Chem Supplies P. Ltd. who had made the above statement. The appellate authority had sought remand report and even at that stage the genuineness of the statement has not been established by allowing cross examination of the person whose statement was relied upon by the revenue. In these circumstances, the decision of the Tribunal being based on the fact, no substantial question of law can be said to arise from the order of the Tribunal. The appeal is dismissed with no order as to costs.” 13.11 The Hon’ble Gujarat High Court, again, in the case of the Commissioner vs. Motabhai Iron and Steel Industries 2014 (10) TMI 723 (Guj.) 14.00 Your Honours, merely on the presumption that since one of the directors of a lender company is an entry provider, all the transactions carried out by all the companies in which such director was a common director, with all the persons cannot be regarded to be bogus transactions. For such proposition, reliance is placed on the decision of the Hon’ble Apex Court in the case of ITO vs. Lakhmani Mewal Das (1976) 103 ITR 437 (SC). 15.00 Your Honours, a similar case for adjudication arose before the Hon’ble ITAT Mumbai in the case of ITO vs. Smt. Pratima Ashar 2019 (7) TMI 1313 (ITAT Mumbai). In such case, the AO made addition on the allegation that some Mr. Praveen Jain was an accommodation entry provider and the assessee had claimed to have taken loans controlled by such Mr. Praveen Jain. The addition was entirely deleted by the CIT(A) and against the Order of the CIT(A), the Department preferred appeal before the ITAT. The ITAT confirmed the action of the CIT(A) in deleting the addition and held that merely on the basis of a statement given by some person, all the transactions carried out by various companies controlled by such person cannot be held to be non-genuine in a circumstance when the assessee had furnished ample of documentary evidences. 16.00 Your Honours, in the body of the assessment order, the learned AO has made reference of various judicial pronouncements but, none of the pronouncements so referred by the learned AO are applicable in the case of the assessee for the reason that the IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 56 of 74 facts of the assessee’s case are quite distinguishable from those referred in the aforesaid pronouncements. 17.00 Your Honours, on the contrary, there are plethora of judgments including those of the Hon’ble Jurisdictional High Court in favour of the assessee which have held that once the identity & creditworthiness of the loan creditors and genuineness of loan transactions are established, no addition can be made in the hands of the loan recipient. The brief notes of such judgments are given below: i) CIT vs. ORISSA CORPORATION P. LTD. (1986) 159 ITR 0078 (SC) Decision in favour of: Assessee Income—Cash credit—Burden of proof—Assessee had given the names and addresses of the creditors—It was in the knowledge of the Revenue that the said creditors were income-tax assessees—Their index number was in the file of the Revenue—Revenue, apart from issuing notices under s. 131 at the instance of the assessee, did not pursue the matter further—Revenue did not examine the source of income of the said alleged creditors to find out whether they were creditworthy or were such who could advance the allowed loans— Tribunal came to the conclusion that the assessee has discharged the burden that lay on him then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence—High Court was, therefore, right in refusing to refer the questions sought for Held : Sec. 68 of 1961 Act was introduced for the first time in the Act. There was no provision in 1922 Act corresponding to this section. The section only gives statutory recognition to the principle that cash credits which are not satisfactorily explained might be assessed as income. The cash credit might be assessed either as business profits or as income from other sources. (Para 7) It is not in all cases that by mere rejection of the explanation of the assessee, the character of a particular receipt as income could be said to have been established; but where the circumstances of the rejection were such that the only proper inference was that the receipt must be treated as income in the hands of the assessee, there is no reason why the assessing authority should not draw such an inference. Such an inference is an inference of fact and not of law. (Para 10) The assessee 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 assessees. Their index number was in the file of the Revenue. The Revenue, apart from issuing notices under s. 131 at the instance of the assessee, did not pursue the matter further. IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 57 of 74 The Revenue did not examine the source of income of the said alleged creditors to find out whether they were credit-worthy or were such who could advance the allowed loans. There was no effort made to pursue the so-called alleged creditors. In those circumstances, the assessee could not do any further. In the premises, if the Tribunal came to the conclusion that the assessee has discharged the burden that lay on him then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. If the conclusion is based on some evidence on which a conclusion could be arrived at, no question of law as such arises. It cannot, therefore, be said that any question of law arose in these cases. The High Court was, therefore, right in refusing to refer the questions sought for. (Paras 13 & 15) Reference—Question of fact—Cash Credit—High Court has no power to call upon the Tribunal to state a case if there was some evidence to support the finding recorded by the Tribunal, even if it appears to the High Court that on reappreciation of the evidence, it might arrive at a conclusion different from that of the Tribunal—Tribunal came to the conclusion that the assessee has discharged the burden that lay on him then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence—High Court was, therefore, right in refusing to refer the questions sought for Held : The High Court has no power to call upon the Tribunal to state a case if there was some evidence to support the finding recorded by the Tribunal, even if it appears to the High Court that on reappreciation of the evidence, it might arrive at a conclusion different from that of the Tribunal.—CIT vs. Daulatram Rawatmull (1964) 53 ITR 574 (SC) : TC 54R.233 followed. The assessee had given t he names and addresses of the alleged creditors. It was in the knowledge of the Revenue that the said creditors were income-tax assessees. Their index numbers were in the file of the Revenue. The Revenue, apart from issuing notice under s. 131 at the instance of the assessee, did not pursue the matter further. The Revenue did not examine the source of income of the said alleged creditors. There was no effort made to pursue the so- called alleged creditors. In the premises, if the Tribunal came to the conclusion that the assessee has discharged the burden that lay on him, then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. If the conclusion is based on which a conclusion could be arrived at, no question of law as such arises. It cannot, therefore, be said that any question of law arose in these cases. The High Court was, therefore, right in refusing to refer the questions sought for. ii) ORIENT TRADING CO. LTD. vs. CIT (1963) 49 ITR 0723 (BOM) Decision in favour of: Assessee IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 58 of 74 Cash credit—Burden of proof—Cash credit in the name of third party— When the entry stands in the name of third party, the assessee satisfies the ITO as to the identity of the third party and also supplies such other evidence which will show, prima facie, that the entry is not fictitious, the initial burden which lies on him can be said to have been discharged by him and it will not, thereafter, be for the assessee to explain further how or in what circumstances the third party obtained money and how or why he came to make a deposit of the same with the assessee—The burden thereafter shifts on to the Revenue to show that the entry represented assessee's suppressed income—Department has to be in possession of sufficient and adequate material in order to reach to such conclusion Held : When cash credits appear in the accounts of an assessee, whether in his own name or in the name of third parties, the ITO is entitled to satisfy himself as to the true nature and source of the amounts entered therein, and if after investigation or inquiry he is satisfied that there is no satisfactory explanation as to the said entries, he would be entitled to regard them as representing the undisclosed income of the assessee. When these credits entries stand in the name of the assessee himself, the burden is undoubtedly on him to prove satisfactorily the nature and source of these entries and to show that they do not constitute a part of his business income liable to tax. Where the entry stands in the name of the assessee's wife or children, or in the name of any other near relation or an employee of the assessee, the burden will lie on the assessee, though the entry is not in his own name, to explain satisfactorily the nature and source of that entry. Where the entry stands not in the name of any such person having a close relation or connection with the assessee, but in the name of an independent party, the burden will still lie upon him to establish the identity of the said party, and to satisfy the ITO that the entry is real and not fictitious. When, however, in a case where the entry stands in the name of third party, the assessee satisfies the ITO as to the identity of the third party and also supplies such other evidence which will show, prima facie, that the entry is not fictitious, the initial burden which lies on him can be said to have been discharged by him. It will not, thereafter, be for the assessee to explain further how or in what circumstances the third party obtained money and how or why he came to make a deposit of the same with the assessee. The burden will then shift on to the Department to show why the assessee's case cannot be accepted and why it must be held that the entry, though purporting to be in the name of a third party, still represents the income of the assessee from a suppressed source. In order to arrive at such a conclusion, however, the Department has to be in possession of sufficient and adequate material.—M.M.A.K. Mohideen Thamby & Co. vs. CIT (1959) 36 ITR 481 (AP) : TC42R.1188 and P.V. Raghava Reddy vs. CIT (1956) 29 ITR 942 (AP) : TC42R.1037 followed. The assessee has sufficiently discharged the burden which lay upon it to explain the nature and source of the cash credits appearing in its accounts and the burden clearly shifted in the present case on to the IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 59 of 74 Department to prove to the contrary and hold that in spite of the assessee's explanation, the entries could still be held to represent the assessee's income from undisclosed sources. There is no material whatsoever on the record on the basis of which the Department can be said to have discharged that burden. The solitary circumstances of a difference of three days in the record of the entries with regard to the items of Rs. 2,00,000 and Rs. 40,000 in the books of account of the assessee and those of S is not in view of the rest of the material on record sufficient to reject the assessee's case. Therefore, it must be held that the amount of Rs. 2,50,000 standing in the books of the assessee to the credit of R on the 10th Oct., 1942 and the further entries of Rs. one lakh and of Rs. 40,000 occurring in the said account on 16th March, 1948, and 19th July, 1948, did not belong to the assessee and did not constitute his undisclosed income. Conclusion : On the facts and circumstances of the case, assessee's initial burden stood discharged and there being no material to show that Revenue discharged its burden, cash credit could not be treated assessee's suppressed income. iii) ASHOK PAL DAGA vs. CIT (1996) 220 ITR 0452 (MP) Decision in favour of: Assessee Reference—Question of law—Assessee having satisfied the IT authority as to the identity of the third party and also supplied the relevant evidence showing prima facie that the entries were not fictitious, the initial burden can be said to be discharged by the assessee—Treating the cash credits and interest thereon as undisclosed income of assessee gave rise to question of law.—Orient Trading Co. Ltd. vs. CIT (1963) 49 ITR 723 (Bom) : TC 42R.1039 applied iv) CIT vs. KAMDHENU STEEL & ALLOYS LTD. & ORS. (2014) 361 ITR 0220 (DEL) Decision in favour of: Assessee; Income—Cash credit—Share application money—Burden of proof and genuineness—Though initial burden is upon the assessee, once he proves the identity of credits/share applications by either furnishing permanent account numbers or copies of bank accounts and shows the genuineness of the transaction by showing money in the banks is by account payee cheques or by draft, etc., then the onus to prove the same would shift to the Revenue—Question which assumes importance at this stage is to what the Revenue is supposed to do to dislodge the initial burden discharged by the assessee and to throw the ball again in the assessee's court demanding the assessee to give some more IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 60 of 74 proofs, as the documents produced earlier by the assessee either become suspect or are rendered insufficient in view of the material produced by the Department rebutting the assessee's documentary evidence—When registered letters addressed to companies returned undelivered AO presumed that these companies did not exist at the given address—But, it has to be conclusively established that the company is non-existence—AO did not bother to find out from the office of the Registrar of Companies the address of those companies from where the registered letter received back undelivered—No effort was made to examine as to whether these companies were filing the IT return and if they were filing the same, then what kind of returns these companies were filing—If there was no return, this could be another factor leading towards the suspicion nurtured by the AO—Likewise, when the bank statements were filed, the AO could find out the address given by those applicant companies in the bank, who opened the bank accounts and are the signatories, who introduced those bank accounts and the manner in which transactions were carried out and the bank accounts operated—This kind of inquiry would have given some more material to the AO to find out as to whether the assessee can be convicted with the transactions which were allegedly bogus and/or companies were also bogus and were created for namesake— Mere failure of the creditors to respond to Department's notices could not be a basis to conclude that the assessee has invested its undisclosed income and invoke provisions of s. 68 against assessee— AO failed to carry his suspicion to logical conclusion by further investigation—More steps which should have been taken by the Revenue in order to find out causal connection between the cash deposited in the bank accounts of the applicant companies and the assessee were not taken—It is necessary to link the assessee with the source when that link is missing, it is difficult to fasten the assessee with such a liability—Additions rightly deleted—In the peculiar facts and circumstances of the case, order of remand was not called for v)Ariba Foods Pvt. Ltd. vs. Asstt. Commissiner of Income Tax (2021) 9 TTJ Online 9 (Trib – Indore) CashCredit—Section68oftheIncome-taxAct,1961—A.Y.2015-16— AOmadeadditionsof Rs.8.80lacsu/s68—CIT(A)deletedtheadditions— HELD—Assesseehasfurnishedcopyof PAN, bank account statement of lender company, audited financial statement, profit and loss account statement, certificate of incorporation, copy of MOA and AOA, etc. — Assessee had discharged its onus of providing the genuineness of the sum credits — ITAT satisfied with the identity and creditworthiness of cash creditor — Thus, ITAT does not find any infirmity in the finding of CIT(A) in deleting the addition. [Refer Para 72, 73 &74] vi) Great Galleon Ventures ltd. vs DCIT Central-2, Indore in Appeal No. IT(SS)A Nos. 114 to 116/Ind/2020 16.8 In the aforesaid facts and circumstances of the case and the various judicial pronouncements as referred to by the assessee in its Synopsis and as also in the light of our detailed findings made in the preceding paras, we are of the considered IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 61 of 74 opinion that the assessee could successfully establish the identity of all the loan creditor companies, the genuineness of the loan transactions carried out with such companies, and as also, the creditworthiness of such loan creditor companies beyond all doubts, by furnishing all the necessary documentary evidences. Further, it is also an undisputed fact that the AO, except relying upon the retracted statements and some list of so-called shell companies, has not brought any positive material on record to discredit the explanation and various documentary evidences furnished by the assessee. In such eventuality, in our view, the ld. CIT(A) was fully justified in deleting the additions. 16.00 Your Honours, now, in respect of the alleged unexplained expenditure of the assessee towards payment of interest of Rs.54,863/- to the above mentioned two lender companies, it is submitted that the learned AO was not justified in invoking the provisions of section 69C of the Income-Tax Act, 1961. Before delving with the issue in hand, it shall be appropriate to have a look at the provisions of section 69C of the Income-Tax Act, 1961, which, for a ready reference, is reproduced as under: "Unexplained expenditure, etc. 69C. Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, offered by him is not, in the opinion of the Assessing Officer, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for such financial year: Provided that, notwithstanding anything contained in any other provision of this Act, such unexplained expenditure which is deemed to be the income of the assessee shall not be allowed as a deduction under any head of income." 16.01 Your Honours, it is submitted that the provisions of section 69C can be invoked if an assessee is found to have incurred any expenditure and the sources of such expenditure are not explained by the assessee. However, in the instant case, the assessee has not only explained the interest payments made by it but has also explained the sources of the funds in respect of which such interest payments have been made. It is therefore, most humbly submitted that the entire interest payment of Rs.54,863/- so made by the assessee to the lender companies is genuine and deserves to be allowed. 16.02 Your Honours, it is submitted that the assessee company has incurred the interest expenditure for the purposes of its business only and therefore, the entire interest expenditure deserves to be allowed under the provisions of s.36(1)(iii) of the Act. 16.03 Your Honours, in the instant appeals, the ld. CIT(A) has confirmed the aforesaid additions made by the ld. AO under s. 68 of the Act by way of giving his findings at para (4.3.9)(D) from page no. 129 to 132 of the IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 62 of 74 impugned appellate order. It is submitted that the ld. CIT(A) has although acknowledged furnishing all the necessary documents by the assessee for establishing the genuiness of the loans. However, the ld. CIT(A) without assigning any cogent reason, chose to brush aside all these documentary evidences and rather, placed reliance upon the so called inquiries conducted by the Investigation Wing and various other Income-Tax Authorities. The ld. CIT(A) has not assigned any basis for his drawing the conclusion that Shri Sharad Darak is a de-famous entry provider of Indore. The ld. CIT(A) hinges his findings on the fact that in certain other cases too, the genuineness of the loans provided by the companies of Shri Sharad Darak were not accepted. It is submitted that such an assumption or even a finding could not have been a basis for disbelieving the genuine transactions, backed by all the necessary documentary evidences, carried out by the assessee specially in a circumstance when the ld. AO did not conduct any independent inquiry at his own and nothing adverse was brought on record. It is a settled law that a suspicion, howsoever strong it might be, cannot substitute legal evidences. 11.1 We have heard rival contentions, perused the records placed before us, duly considered the facts and circumstances and carefully gone through the judgments and decisions referred to and relied upon by both the sides. 11.2 We find that the ld. CIT(A) at para (4.4.9) of his Order from page no. 119 to 133 has elaborately dealt with each and every unsecured loan in respect of which the AO has made addition in various assessment years. In order to analyse the facts of each of the loan creditors, we have also considered it necessary to give our findings, for all such creditors in the paras set out below. 11.3 Before embarking upon the genuineness of all the loan creditors in respect of whom the ld. AO has made the additions by invoking the provisions of section 68 and 69C of the Act, for various assessment years, it would be apt to note that for A.Y. 2012-13, the AO has made additions amounting to Rs.75,00,000/-, Rs.75,00,000/- and Rs.9,77,400/- on account of loans claimed to have been received by the assessee from Jayant Security and Finance Ltd., Jay Jyoti India Pvt Ltd. and Smt. Kshamta Dubey respectively. For such assessment year 2012-13, the AO has also made addition u/s. 69C in respect of interest payment amounting to Rs. 54,863/- to Jayant Security and Finance Ltd. and Jay Jyoti India Pvt Ltd.. Thus, in totality, for A.Y. 2012-13, the AO vide para (8) of his Order, has made an addition of Rs.1,60,32,263/- in the income of the assessee. Likewise, for A.Y. 2014-15, the AO has made addition amounting to Rs.1,85,00,000/- on account of loans claimed to have been received by the assessee from four companies namely Octagon Media Matrix Pvt. Ltd., Rajwadi Retails Trade Systems Pvt. Ltd., Ranjit Securities Pvt. Ltd. and Suzlon Securities Pvt. Ltd.. For such assessment year 2014-15, the AO has also made addition u/s. 69C in respect of interest payment amounting to Rs. 4,81,875/- to the aforesaid four companies. Thus, in aggregate, for A.Y. 2014-15, the AO vide para (8) of his Order, has made an addition of Rs.1,89,81,875/- in the income of the assessee. We find that the aforesaid IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 63 of 74 additions for both A.Y. 2012-13 and A.Y. 2014-15 have been made by the AO (i) on the basis of some information available with him regarding procurement of loans by the assessee from some dubious/shell companies (ii) the report of the Special Auditors obtained during the course of the assessment proceedings; (iii) one excel sheet containing the details of loans obtained by the assessee from some lenders, which were found duly recorded in its books of accounts; (iv) statement of Shri Sharad Darak recorded u/s. 131 on 21/02/2014 in relation to the search conducted in the case of some other assessee and (v) statement of some Shri Rajesh Vyas. However, we find that none of the basis taken by the AO during the course of the assessment proceedings has any nexus with any incriminating document or material found during the course of the search operations carried out under s. 132 of the Act in the premises of the assessee and its directors. In our considered view, the report of the Special Auditors obtained during the course of the assessment proceedings or the statements of third parties recorded either prior to or after the search or for that matter, finding of one excel sheet containing the detail of loans already recorded in the books of accounts cannot be said to be incriminating evidence or material against the assessee recovered during the course of search. Since, while adjudicating the ground no. 2 of the assessee for A.Y. 2012-13 and A.Y. 2014-15, supra, we have already held that in respect of the completed assessment years, no addition in an assessment made u/s. 153A of the Act can be made without having recourse to any incriminating material, the aforesaid additions so made by the AO vide para (8) of his Order on account of unsecured loans and unexplained interest are not sustainable on this legal ground itself. 11.4 Loan From (i) M/s. Jayant Security and Finance Ltd.; (ii) M/s. Jay Jyoti India Pvt. Ltd.; (iii) M/s. Octagon Media Matrix Pvt. Ltd.; (iv) M/s. Rajwadi Retails Trade Systems Pvt. Ltd.; (v) M/s. Ranjit Securities Ltd.; (vi) M/s. Suzlon Securities Pvt. Ltd.; (vii) M/s. East West Finvest India Pvt. Ltd.; and (viii) M/s. Zyka Merchandise Pvt. Ltd. 11.4.1 We find that out of the various additions made by the AO in respect of the loan transactions claimed to have been carried out by the assessee with the above named eight creditors, in respect of loan taken by the assessee from two companies namely M/s. Jayant Security and Finance Ltd. and M/s. Jay Jyoti India Pvt. Ltd. respectively of a sum of Rs.75,00,000/- and Rs.75,00,000/- during the A.Y. 2012-13 and interest payments of Rs.40,685/- and Rs.14,178/- respectively to such companies during A.Y. 2012-13 and further, in respect of loan from four companies namely, M/s. Octagon Media Matrix Pvt. Ltd., M/s. Rajwadi Retails Trade Systems Pvt. Ltd., M/s. Ranjit Securities Ltd. and M/s. Suzlon Securities Pvt. Ltd. respectively of a sum of Rs.50,00,000/-, Rs.50,00,000/-, Rs.35,00,000/- and Rs.50,00,000/- during the A.Y. 2014-15 and interest payments of Rs.1,12,500/-, Rs.1,12,500/-, Rs.1,44,375/- and Rs.1,12,500/- respectively to such companies during A.Y. 2014-15, the AO has made additions of Rs. 1,50,00,000/- for A.Y. 2012-13 and Rs.1,85,00,000/- for A.Y. 2014-15 u/s. 68 of the Act and has also made IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 64 of 74 additions amounting to Rs.54,863/- and Rs.4,81,875/- respectively for A.Y. 2012-13 and A.Y. 2014-15 on account of unexplained interest payment u/s. 69C of the Act to such loan creditors. Although, in respect of such additions, on the legal ground as discussed in para (11.3) supra, that the assessment years 2012-13& A.Y. 2014-15 were complete assessment years and therefore, for such assessment years, no addition could have been made without having recourse to any incriminating material found during the course of the search. But, even on merits, we find no substance in the additions so made by the AO in respect of all the above named six loan creditors. 11.4.2 We find that in respect of the above named eight lender companies, the AO has given his findings at para (8.12) to para (8.20) of his Order. We find that at para (8.12), the AO has alleged that during the course of the search and post search proceedings, it was found that the assessee had received huge unsecured loans from certain suspicious companies which were directly/indirectly controlled by a well known accommodation entry provider of Indore Shri Sharad Darak, who used to facilitate his clients by routing of unaccounted funds by providing accommodation entries through his companies. At the same para, the AO has given the list of the companies controlled by Shri Sharad Darak, which inter alia, includes the above named eight lender companies. At para (8.14), without giving any specific details, the AO further made a finding that during the assessment proceedings and search & survey actions of the Income Tax Department in the case of Shri Sharad Darak, it was noted that Shri Sharad Darak is a full time entry provider. At para (8.15), the AO averted that a survey u/s. 133A of the Act was conducted by the Raipur Investigation Wing at the premises of East West Finvest Private Limited, Purvi Finvest Limited and Trimurthy Finvest Limited and during the course of such survey, it was found that the registered office of these companies were actually belonging to some Shri Dinesh Agrawal, Auditor of the Companies. According to the AO, during the course of the survey proceedings, no books of account of the above named three companies were found and further, in the premises of the companies surveyed, no staff was found working. The AO further at para (8.16) of his Order found that during the course of the assessment proceedings, in the case of some Krishna Oils and Proteins Private Limited for A.Y. 2011-12, the DCIT-5(1), Indore had conducted certain inquires and had also recorded the statement of Shri Sharad Darak. As per the AO, from the statement of Shri Sharad Darak recorded u/s. 131 on 21/02/2014, it was proved that the companies run by Sharad Darak such as Jayant Security and Finance Limited was a bogus company and used for providing of accommodation entries. The AO at para (8.20) also commented that two companies of Shri Sharad Darak namely Jayant Security and Finance Limited and East West Finvest India Limited were also featuring in the investigation report of the Directorate of Income-Tax (Inv.) Kolkata, as bogus loss/ exempted income providing paper companies. Finally, the AO reached to the conclusion that the subject eight lender companies were bogus/paper companies controlled by the accommodation entry provider Shri Sharad Darak. Accordingly, he IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 65 of 74 made the addition u/s. 68 of the Act in the income of the assessee for various assessment years in respect of the loans taken from the above named eight lender companies and further made addition u/s. 69C of the Act for various assessment years, by holding the interest expenditure as unexplained expenditure. 11.4.3 We find that before the ld. CIT(A), the assessee had made a detailed explanation on the subject issue along with the various documentary evidences. We find that copies of the written submission made by the assessee before the ld. CIT(A) have also been furnished by the assessee before us in its Paper Books for various assessment years. 11.4.4 We find that the main grounds of contention of the assessee before the ld. CIT(A) was that (i) during the course of the assessment proceedings, it had furnished all the necessary documents to establish the identity of the loan creditors, the genuineness of the loan transactions and the creditworthiness of the loan creditors, as contemplated under the provisions of s.68 of the Act; (ii) after having discharged its initial onus of proving during the course of the assessment proceedings, the assessee had specifically requested the AO to issue the summons u/s. 131 / notices u/s. 133(6) to the loan creditors but despite making such specific request, the AO did not do the same and made the addition; (iii) the entire additions have been made by the AO only on the basis of findings given by the Special Auditors which were not factually correct without applying his own mind; (iv) the AO except relying upon some information gathered behind the back of the assessee by some other authorities in some other proceedings did not bring on record any adverse material against the assessee; (v) during the course of the assessment proceedings, no incriminating material or document was found wherefrom it could have been inferred that the unsecured loan transactions recorded in the regular books of account of the assessee were not genuine; (vi) in respect of some of the lender companies, allegedly controlled by Shri Sharad Darak, the Income Tax Department has duly framed assessments u/s. 143(3) of the Act which fact establishes the actual existence and identity of such companies; (vii) in respect of some of the lender companies allegedly belonging to Shri Sharad Darak, even during the course of the income tax appeals, before the Hon’ble Income Tax Appellate Tribunal, genuineness of the transactions have been approved by the Hon’ble ITAT; (viii) the AO has relied upon only hearsays and some information without confronting the same to the assessee and without giving the opportunity of any cross examination; (ix) the transactions carried out by the assessee were of the nature of loan and not of the nature of share capital or share premium and therefore, it was not required to prove the source of the source as contemplated under the proviso to section 68 of the Act; and (x) since the interest expenditure were fully recorded in the books, the provisions of section 69C could not have been invoked. 11.4.5 We find that the ld. CIT(A) has dealt with the additions made by the AO in respect of the aforesaid loan creditors at para (4.4.9.D) of his IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 66 of 74 Order. We find that the ld. CIT (A) has given a categorical finding that before him, the assessee had furnished numerous documents for establishing its claim regarding the identity of the loan creditors, genuineness of the loan transactions and creditworthiness of the loan creditors. However, we find that having given such categorical findings, the ld. CIT(A) held that from the various inquiries conducted by the Investigation Wing and the Income-Tax Authorities, it had got established that Shri Sharad Darak was a defamous entry provider of Indore. The ld. CIT(A) further held that in many of the cases, the genuineness of the loans provided by the companies of Sharad Darak have not been accepted. Finally, with the above findings, the ld. CIT(A) concluded that once it is proved that the assessee has taken any loan from any entry provider, then, furnishing of any documentary evidences could not establish the loan transactions as contemplated u/s. 68 of the Act and accordingly, confirmed the various additions for various assessment years, made by the AO on this count. 11.4.6 We find that before us, in respect of the subject loan transactions, the assessee has placed his reliance on the written submissions made before the ld. CIT(A) which are duly placed in the Paper Books of the assessee filed before us for the concerning assessment years. The counsel of the assessee also placed reliance on the various documentary evidences furnished by it before both the authorities below which have also been furnished in the Paper Books for concerning assessment years filed before us. In addition to that, the assessee has also made a written synopsis which has already been reproduced by us in the preceding paras. In particular, the counsel of the assessee has invited our attention to the decision of the Coordinate ‘G’ Bench Mumbai, pronounced on 01/06/2021 in the case of JCIT vs. M/s. Shalimar Housing and Finance Limited in Appeal No. ITA- 4079/Mum/2019, in which the similar issue of cash credits accepted by the assessee from various companies of Shri Sharad Darak such as East West Finvest India Limited, Jayant Security and Finance Ltd., Jay Jyoti India Pvt. Ltd., Octagon Media Matrix Pvt. Ltd. and Purvi Finvest Ltd. was before the Hon’ble Bench. In this case, the Hon’ble Bench after considering all the aspects held that the lending companies were existing companies and were having capacity to grant the loan to the assessee. The counsel of the assessee further relied upon the decision of this Bench in the case of M/s. Tirupati Construction, Ujjain vs. DCIT, Ujjain in AppealNo. ITA/522/Ind/2014 pronounced on 14/07/2016 in which this Bench had held the loan transactions carried out by the assessee with East West Finvest India Limited, Jayant Securities and Finance Ltd. and KK Patel Finance Limited, companies controlled by Shri Sharad Darak as genuine. The counsel of the assessee also placed the reliance on the decision of this Bench in the case of ACIT vs. Pramod Kumar Sethi as reported in (2019) 34 ITJ 39 (Trib.Indore) in which case too, the loans taken by the assessee from various companies of Shri Sharad Darak were held to be genuine. 11.4.7 We find that in the instant case, the assessee has furnished all the necessary documents relating to each of the above named lender companies IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 67 of 74 such as copies of certificates of incorporation, memorandum & articles of association, copies of income-tax returns, copies of master data downloaded from website of MCA, copies of loan confirmation letters duly given by the lender companies, copies of relevant bank statements of the lender companies, copies of the relevant bank statements of the assessee, copies of the audited financial statements of the lender companies, copies of the Affidavits duly sworn by Shri Sharad Darak confirming the loan transactions and in some cases, copies of the assessment orders passed u/s. 143(3) of the Act. We also find that in respect of the loan transactions, the assessee has made the payment of interest and has also made the necessary TDS thereon. Thus, in our considered view, by furnishing all the necessary documents, such as the certificates of incorporation, copies of Memorandum and Articles of Association, copies of acknowledgement of income tax returns, copies of the master datas downloaded from the official website of the MCA, copies of the PAN Cards, the assessee could be able to establish the statutory as well as the physical identity and existence of all the aforesaid eight loan creditors. We further find from the copies of duly signed letters of confirmation, copy of the relevant abstracts of the bank accounts of the loan creditors that all the loan transactions have been carried out through banking channels which were found duly reflected in the bank statements of the assessee as well as the loan creditors and the copies of the Affidavits given by Shri Sharad Darak, the assessee could be able to establish the genuineness of the loan transactions. Further, from a perusal of the copies of the lender’s bank statements placed in the concerning Paper Books for A.Y. 2012-13,A.Y. 2014-15, A.Y. 2016-17& A.Y. 2017-18, we find that in none of the cases, before making remittance to the assessee towards loan transactions, any cash was deposited by the lenders. We have also perused the audited financial statements of the lenders and from such financial statements, we found that such lenders were having sufficient funds available for providing loans to the assessee company. From the copies of the audited financial statements of the lender companies, we further find that all the aforesaid eight lender companies were having ample of funds which were available to them for providing loans to the assessee. We find that although all the documentary evidences for establishing the genuineness of the loans, as aforesaid, were also filed by the assessee before the AO, but the AO could not find any specific defect or discrepancy in any of such documentary evidences. We find that even before us, the ld. CIT(DR) could not point out any single defect or discrepancy in such documents.We find that by furnishing all the necessary documentary evidences, as discussed hereinabove, the assessee could be able to discharge its initial onus of proving the nature and sources of credit entries relating to the aforesaid loan creditors, as contemplated u/s. 68 of the Act. 11.4.8 However, we find that in the instant case, both, the AO as well as the ld. CIT(A) have discarded and brushed aside such documentary evidences merely on the hearsays and inquiries conducted by some other Income Tax Authorities in some other cases without confronting the assessee with such inquiries. We find that the AO has made the additions IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 68 of 74 with preconceived notions about the lender companies without having any corroborative evidence or tangible material on his record. We find that the AO has made reference of some survey conducted in some of the concerns of Shri Sharad Darak and that too, in the year 2014. We further find that at para (8.16), the AO has made reference of some statement given by Shri Dinesh Agrawal who was found during the course of the survey conducted. We find that the AO has not provided the assessee the copy of statement of Shri Dinesh Agrawal on whose statement, he has placed reliance for making the subject additions. Even from the abstracts of the statement of Shri Dinesh Agrawal, which was only an Auditor of some of the companies of Shri Sharad Darak, it cannot be inferred that the above named eight lender companies were merely paper companies or for that matter, the transactions carried out by the assessee with such companies were not genuine. We find that the AO has also made a reference of some statement u/s. 131 of Shri Sharad Darak recorded by some other assessing officer in the case of some other assessee but again, the copy of such statement was not provided by the AO to the assessee. We find that before the ld. CIT(A), the assessee had duly furnished the copies of Affidavits duly sworn by Shri Sharad Darak before Notary Public. We also find that copies of such Affidavits were also provided by the ld. CIT(A) to the AO under Rule 46A of the Income Tax Rules, 1962, but the AO did not make any further examination or inquiry from Shri Sharad Darak. From the copy of the Remand Report dated 14/09/2020 submitted by the AO to the ld. CIT(A), as placed at page no. 421 to 438 of the assessee’s Paper Book for A.Y. 2012-13, we noted that the Affidavits filed by Shri Sharad Darak have been discarded by the AO on the extraneous grounds such as timing of the filing of the Affidavits, generic nature of the Affidavits, without taking any pain to cross-examine Shri Sharad Darak on the Affidavits so furnished. We find that copies of such Affidavits of Shri Sharad Darak in respect of each and every subject lender company have duly been filed by the assessee before us in his Paper Book for A.Y. 2012-13 at page no. 280 to 282 & 394 to 395, for A.Y. 2014-15 at page no. 103 to 105, 164 to 166 & 293 to 295, for A.Y. 2016-17 at page no. 133 to 135 and for A.Y. 2017-18 at page no. 105 to 107, 185 to 187 & 283 to 284. We find that in all these Affidavits, Shri Sharad Darak has furnished the complete details of the identity of the concerning company and has also furnished the details of transactions carried out by his companies with the assessee company. In such Affidavits, Shri Sharad Darak in unequivocal terms has confirmed the loan transactions carried out by his various companies with the assessee company. 11.4.9 We find full substance in the contention of the assessee that in the instant case, the AO was not only duty bound to provide copies of the statements of Shri Dinesh Agrawal and Shri Sharad Darak which were recorded by some other authorities in some other proceedings, and which were intended to be used against the assessee as an evidence, but, was also required to afford opportunity of cross examination of such witnesses to the assessee, which he miserably failed to do. In such circumstances, in our considered view, merely on the basis of unconfronted statements, the AO IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 69 of 74 was not legally justified in making the additions in respect of the aforesaid loan creditors. 11.4.10 We find that on the issue of cross-examination, the Hon’ble Supreme Court in the case of M/s. KishinchandChellaram vs. CIT (1980) 125 ITR 713 (SC) was pleased to hold that the assessing officer is duty bound to confront the material collected by him to the assessee. The Hon’ble Supreme Court again in the case of M/s. Andaman Timber Industries V/s. Commissioner of Central Excise, Kolkatta-II 2016 (15) SCC 785 (SC) was pleased to hold as under: “5. According to us, not allowing the Assessee to crossexamine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the Assessee was adversely affected. It is to be borne in mind that the orderof the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the Assessee disputed the correctness of the statements and wanted to crossexamine, the Adjudicating Authority did not grant this opportunity to the Assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the Assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that crossexamination of the said dealers could not have brought out any material which would not be in possession of the Assessee themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the Assessee wanted to cross-examine those dealers and what extraction the Assessee wanted from them. 6. As mentioned above, the Assessee had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross-examination. That apart, the Adjudicating Authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list itself could be the subject matter of cross-examination. Therefore, it was not for the Adjudicating Authority to presuppose as to what could be the subject matter of the crossexamination and make the remarks as mentioned above. We may also point out that on an earlier occasion when the matter came before this Court in Civil Appeal No. 2216 of 2000, order dated 17-3-2005 [2005 (187) E.L.T. A33 (S.C.)] was passed remitting the case back to the Tribunal with the directions to decide the appeal on merits giving its reasons for accepting or rejecting the submissions. 7. In view the above, we are of the opinion that if the testimony of these two witnesses is discredited, there was no material with the Department on the basis of which it could justify its action, as the statement of the aforesaid two witnesses was the only basis of issuing the show cause notice.” IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 70 of 74 11.4.11 Their Lordships of the Hon’ble Supreme Court, again, in the case of Ayaaubkhan Noorkhan Pathan vs. The State of Maharashtra and Ors., 2013 AIR 58 (SC) was pleased to hold as under: “23. A Constitution Bench of this Court in State of M.P. v. ChintamanSadashivaVaishampayan AIR 1961 SC 1623, held that the rules of natural justice, require that a party must be given the opportunity to adduce all relevant evidence upon which he relies, and further that, the evidence of the opposite party should be taken in his presence, and that he should be given the opportunity of cross-examining the witnesses examined by that party. Not providing the said opportunity to cross-examine witnesses, would violate the principles of natural justice. (See also: Union of India v. T.R. Varma, AIR 1957 SC 882; Meenglas Tea Estate v. Workmen, AIR 1963 SC 1719; M/s. Kesoram Cotton Mills Ltd. v. Gangadhar and Ors. ,AIR 1964 SC 708; New India Assurance Co. Ltd. v. Nusli Neville Wadia and Anr. AIR 2008 SC 876; Rachpal Singh and Ors. v. Gurmit Singh and Ors.AIR 2009 SC 2448; Biecco Lawrie and Anr. v. State of West Bengal and Anr. AIR 2010 SC 142; and State of Uttar Pradesh v. Saroj Kumar Sinha AIR 2010 SC 3131). 24. In Lakshman Exports Ltd. v. Collector of Central Excise (2005) 10 SCC 634, this Court, while dealing with a case under the Central Excise Act, 1944, considered a similar issue i.e. permission with respect to the cross- examination of a witness. In the said case, the Assessee had specifically asked to be allowed to cross-examine the representatives of the firms concern, to establish that the goods in question had been accounted for in their books of accounts, and that excise duty had been paid. The Court held that such a request could not be turned down, as the denial of the right to cross-examine, would amount to a denial of the right to be heard i.e. audi alteram partem. 28. The meaning of providing a reasonable opportunity to show cause against an action proposed to be taken by the government, is that the government servant is afforded a reasonable opportunity to defend himself against the charges, on the basis of which an inquiry is held. The government servant should be given an opportunity to deny his guilt and establish his innocence. He can do so only when he is told what the charges against him are. He can therefore, do so by cross-examining the witnesses produced against him. The object of supplying statements is that, the government servant will be able to refer to the previous statements of the witnesses proposed to be examined against him. Unless the said statements are provided to the government servant, he will not be able to conduct an effective and useful crossexamination. 29. In Rajiv Arora v. Union of India and Ors. AIR 2009 SC 1100, this Court held: 30. The aforesaid discussion makes it evident that, not only should the opportunity of cross-examination be made available, but it should be one of effective crossexamination, so as to meet the requirement of the principles of natural justice. In the absence of such an opportunity, it cannot be held that the matter has been decided in accordance with law, as cross-examination is an integral part and parcel of the principles of natural justice.” IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 71 of 74 11.4.12 The Hon’ble Rajasthan High Court in the case of the CIT vs. Smt. Sunita Dhadda 2017 (7) TMI 1164 (Raj.), by taking into consideration the relevant case laws pronounced in various parts of the country, has also allowed the appeal of the assessee on the ground that the assessee was not given any opportunity of cross-examination of the persons whose statements were recorded and relied upon. Such an Order of the Hon’ble Rajasthan High Court has been upheld by the Hon’ble Supreme Court in CIT vs. Smt. Sunita Dhadda 2018 (3) TMI 1610 (SC) by dismissing the SLP of the Department. 11.4.13 We also find that during the course of the search u/s. 132 of the Act, in the premises of the assessee company and its directors, no incriminating material or any evidence raising any doubt regarding the genuineness of the loan transactions with the above named creditors was found or seized. We further find that during the course of the assessment proceedings, despite making a specific request to this effect by the assessee, the AO did not make any independent inquiry either by way of issuance of summons u/s. 131 or by way of issuance of letters u/s. 133(6) of the Act to the aforesaid lenders. We also find that the various case laws relied upon by the AO are not applicable to the assessee’s case. Thus, relying upon the decisions of the Hon’ble Jurisdictional High Court in the cases of CIT vs. Metachem Industries (2000) 245 ITR 0160 (MP), CIT vs. STL Extrusions Pvt. Ltd. (2011) 333 ITR 269 (MP), PCIT vs. Chain House Internationatioal (P) Ltd. & Ors. (2018) 408 ITR 0561 (MP), Ashok Pal Daga vs. CIT (1996) 220 ITR 0452 (MP), CIT vs. Mehrotra Brothers (2004) 270 ITR 0157 (MP), the decision of the Hon’ble High Court of Gujarat in the case of DCIT vs. Rohini Builders (2002) 256 ITR 360 (Guj.), the decisions of the Hon’ble High Court of Delhi in the cases of CIT vs. Kamdhenu Steel and Alloys Ltd. & Ors. (2014) 361 ITR 0220 (Del.) and CIT vs. Dalmia Resorts International (2007) 290 ITR 508 (Del.), the decision of the Hon’ble High Court of Patna in the cases of CIT vs. Hanuman Agrawal (1985) 151 ITR 150 (Patna) and again in the case of Add. CIT vs. Bahari Brothers (P) Ltd. (1985) 154 ITR 0244 (Patna) andthe decision of the Hon’ble Apex Court in the case of CIT vs. Orissa Corporation P. Ltd. (1986) 159 ITR 0078 (SC) we find absolutely no justification in the AO’s making the additions in respect of the aforesaid loan creditors, in the income of the assessee either u/s. 68 of the Act or u/s. 69C of the Act for various assessment years. We find that the sole basis for making the addition by the AO was some statements of Shri Dinesh Agrawal and Shri Sharad Darak recorded by some of the Income Tax Authorities in some other cases, but since, neither the copies of such statements were provided to the assessee nor the assessee was given an opportunity of cross examination of such persons making the statements, in our considered view, such statements have no evidentiary value in the eyes of law against the assessee. We also find that neither during the course of the search any evidence was found that the assessee company itself provided cash to the lender companies for procuring cheques under the garb of loans nor the AO could bring any single material to this effect on record. In our considered view, except leveling a bald charge against the lending companies, the AO by IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 72 of 74 himself has not conducted any independent inquiry to substantiate his allegation that the lender companies were mere accommodation entry provider companies. We find that in the similar circumstances, the Hon’ble High Court of Delhi in the case of Pr. CIT vs. Oriental International Company Pvt. Ltd. (2018) 401 ITR 0083 (Delhi) has dismissed the appeal of the Revenue by holding that the AO did not conduct his task diligently and had not brought on record that whether the amounts were infused in the shareholders account in cash. We also find that the various case laws relied upon by the AO are not applicable to the assessee’s case. 11.4.14 We also find that in the similar circumstances, the additions made by some assessing officers in the case of the respective assesses, in respect of the loans taken by such assesses from various companies of Shri Sharad Darak, u/s. 68 of the Act, have been deleted by this Coordinate Bench itself and as also, by the Coordinate ‘G’ Bench of Mumbai. We find that Coordinate ‘G’ Bench Mumbai, in its Order pronounced on 01/06/2021 in the case of JCIT vs. M/s. Shalimar Housing and Finance Limited in Appeal No. ITA- 4079/Mum/2019, in which the similar issue of cash credits accepted by the assessee from various companies of Shri Sharad Darak such as East West Finvest India Limited, Jayant Security and Finance Ltd., Jay Jyoti India Pvt. Ltd., Octagon Media Matrix Pvt. Ltd. and Purvi Finvest Ltd. was before the Hon’ble Bench has held that all these lending companies were existing companies and were having capacity to grant the loan to the assessee. We also find that this Bench in the case of M/s. Tirupati Construction, Ujjain vs. DCIT, Ujjain in AppealNo. ITA/522/Ind/2014 vide is Order dated 14/07/2016 has held that the loan transactions carried out by the assessee with East West Finvest India Limited, Jayant Securities and Finance Ltd. and KK Patel Finance Limited, companies controlled by Shri Sharad Darak were genuine. Further, this Bench in the case of ACIT vs. Pramod Kumar Sethi as reported in (2019) 34 ITJ 39 (Trib.Indore) and again in the case of Shri Sanjay Shukla, Indore vs. ACIT, Central Circle-2, Indore as reported in 2022 (4) TMI 385-ITAT, Indore has also upheld the action of the CIT(A) in deleting the additions made by the AO in the assessee’s income on account of loans taken by the respective assessees from the various companies controlled by Shri Sharad Darak. In the case of Shri Pramod Kumar Sethi (supra) this Bench has held the loan transactions carried out by the assessee in that appeal with Trimurti Finvest Pvt. Ltd., Purvi Finvest Pvt. Ltd., KK Patel Finance Ltd. and East West Finvest India Ltd. as genuine loan transactions whereas, in the case of Shri Sanjay Shukla (supra), this Bench has held the loan transactions carried out by that assessee with M/s. Jayant Securities and Finance Limited and M/s. Jay Jyoti India Pvt. Ltd. as genuine. 11.4.15 Thus, in terms of the findings given above and as also, the legal authorities cited by us at para (11.4.23) and (11.4.24) supra, we are of the considered view that in respect of all the above named eight loan creditors, by furnishing the documentary evidences as discussed hereinabove, the assessee could be able to fully discharge its onus of proving all the three IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 73 of 74 ingredients as contemplated u/s. 68 of the Act viz. (i) identity of the creditor; (ii) genuineness of the loan transactions; and (iii) creditworthiness of the loan creditor beyond all doubts. Accordingly, in our considered view, the entire additions u/s. 68 as well as u/s. 69C of the Act, made by the AO, vide para (8) of his Order, in respect of all the loan transactions carried out by the assessee company with (i) M/s. Jayant Security and Finance Ltd.; (ii) M/s. Jay Jyoti India Pvt. Ltd.; (iii) M/s. Octagon Media Matrix Pvt. Ltd.; (iv) M/s. Rajwadi Retails Trade Systems Pvt. Ltd.; (v) M/s. Ranjit Securities Ltd.; (vi) M/s. Suzlon Securities Pvt. Ltd.; (vii) M/s. East West Finvest India Pvt. Ltd.; and (viii) M/s. Zyka Merchandise Pvt. Ltd. for A.Y. 2012-13, A.Y. 2014- 15, A.Y. 2015-16, A.Y. 2016-17 and A.Y. 2017-18are not justified and consequently, the AO is hereby directed to delete the same. 11.4.16 In the result, we find no substance in the action of the ld. CIT(A) in confirming the additions made by the AO vide para (8) of his Order and accordingly, to such extent, we hereby set-aside the findings given by the ld. CIT(A). In our considered view, none of the additions made by the AO vide para (8) of his assessment order are sustainable. Consequently, the Assessee’s Ground Nos. 3(a) to 3(f) for A.Y. 2012-13 & A.Y. 2014-15 and Ground Nos. 2(a) to 2(e) for A.Y. 2015-16, A.Y. 2016-17and A.Y. 2017-18 are Allowed. 12. Ground No. 3 of the Assessee for A.Y. 2017-18 12.1 Through the Ground No.3 taken for A.Y. 2017-18, the assessee has challenged the action of the ld. CIT(A) in upholding the AO’s action for invoking the provisions of s.115BBE of the Act in respect of disallowance of interest on unsecured loans. 12.2 Before us, the counsel of the assessee has not pressed this Ground and therefore, the same is hereby Dismissed. 13. In the result, the appeals of the assessee are partly allowed. The order pronounced as per Rule 34 of ITAT Rules, 1963 on 26.04.2022. Sd/- Sd/- (MAHAVIR PRASAD) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER दनांक /Dated : 26.04.2022 Patel/Sr. PS IT(SS)A No.170 to 174/Ind/2020 Assessment Years: 2012-13 & 2014-15 to 2017-18 M/s. Global Realcon Pvt. Ltd. Page 74 of 74 Copy to: The Appellant/Respondent/CIT concerned/CIT(A) concerned/ DR, ITAT, Indore/Guard file. By Order, Asstt.Registrar, I.T.A.T., Indore
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