Assessee had received the accommodation entries in form of bogus unsecured loans, AO having noticed that completed the assessment by making an addition under section 68. Held: As decided in assessee's own case [ITA No. 6099/Mum/2016, dated 10-8-2018] and in ITA No. 5637/Mum/2017 : 2019 TaxPub(DT) 1303 (Mum-Trib), dated 16-1-2019] for loans received AO had no valid basis for treating the 'unsecured loans' as 'accommodation entries'. There was nothing on the record to show that the assessee admitted at any point of time to have procured accommodation entries of loans. Thus, addition made by AO was deleted.
IN THE ITAT, MUMBAI BENCH
RAJESH KUMAR, A.M. & AMARJIT SINGH, J.M.
DCIT v. Jainam Investments
I.T.A. Nos. 4286 & 4474/Mum/2019
25 February, 2021
In favour of assessee.
Assessee by: Shri Suchek Anchaliya (AR)
Revenue by: Shri Rahul Raman (DR)
Amarjit Singh, J.M.
The above mentioned appeals have been filed by the revenue against the different order passed by the Commissioner (Appeals)-50, Mumbai [hereinafter referred to as the 'CIT(A)'] relevant to the assessment years 2011-12 & 2016-17.
ITA No. 4286/Mum/2019:
2. The revenue has filed the present appeal against the Order, dated 9-4-2019 passed by the Commissioner (Appeals)-50, Mumbai [hereinafter referred to as the 'CIT(A)'] relevant to the assessment year 2011-12.
3. The revenue has raised the following grounds :--
'1. Whether on the facts and circumstances of the case and in law, the Commissioner (Appeals) was justified in deleting the addition of Rs. 24.35 Crore made under section 68 of the Income Tax Act without appreciating the finding that Shri Bhanwarlal Jain is engaged in the business of accommodation entries and hence assessing officer was correct in concluding that the assessee was a beneficiary of the accommodation loans.
The appellant prays that the order of the Commissioner (Appeals) on the above grounds be set aside and that of the assessing officer be restored.
The appellant craves leave to amend or alter any ground and/or add new grounds which may be necessary.'
4. The brief facts of the case are that the assessee filed its return of income on 12-9-2011 declaring total income to the tune of Rs. Nil for the assessment year 2011-12. The return was processed under section 143(1) of the Income Tax Act, 1961. Thereafter, the case of the assessee was reopened under section 148 of the Act. The reasons for reopening of the assessment was given to the assessee. The assessee received the accommodation entry in Form of bogus unsecured loans from Bhanwarlal Jain Group run entities during the previous year in consideration. The assessee filed the objection vide Letter, dated 17-5-2018. The assessing officer rejected the objections by virtue of Order, dated 1-6-2018. The assessing officer completed the assessment by making an addition of Rs. 24.35 crores under section 68 of the Act treating the loans received by the appellant as bogus thereby assessing the total income of the appellant at Rs. 9,24,88,940 vide Order, dated 13-12-2018. Thereafter, the assessee was not satisfied and filed an appeal before Commissioner (Appeals) who allowed the claim of the assessee, therefore, the revenue has filed the present appeal before us.
Issue No. 1
5. Under this issue the revenue has challenged the deletion the addition of Rs. 24.35 crore made under section 68 of the Act. The learned Representative of the revenue has argued that the Bhanwarlar Jain Group was engaged in providing the accommodation entry but the Commissioner (Appeals) has wrongly allowed the claim of the assessee, therefore, the finding of the Commissioner (Appeals) is not justifiable, hence, is liable to be set aside. However, on the other hand, the learned Representative of the assessee has strongly relied upon the order passed by the Commissioner (Appeals) in question. Before going further, we deem it necessary to advert the finding of the Commissioner (Appeals) on record :--
'13.0 I have considered the facts of the case, submissions of the Appellant, the observations of the assessing officer contained in the assessment order and the other materials available on record on this issue.
13.1 I have noted that this is not a new issue in the case of the Appellant and for the subsequent assessment years in the Appellant's own case, the matter relating to the loan entries from the Bhanwarlal Jain Group of entities had travelled up-to the Hon'ble ITAT, Mumbai based on the same facts and circumstances.
13.2 I have gone through the assessment order passed by the assessing officer and noted sat the assessing officer had relied upon the same material and advanced similar was sent as had been in the latter assessment years. The assessing officer had not brought on record any new material, argument, contention or fact in the present assessment order, under challenge.
13.3 It is a material fact on record that relevant to the assessment year 2012-13, an addition of Rs. 24.75 crores was made by the assessing officer under section 68 of the Act for loans received by the Appellant from various parties belonging to the Bhanwarlal Jain Group. The Appellant preferred an Appeal before Commissioner (Appeals), who had vide Order No. Commissioner (Appeals)-30/19(2)/559/15-16 deleted the addition made under section 68 of the Act on account of loan entries taken from the various concerns of Shri Bhanwarlal Jain and other related additions. The Department preferred an Appeal before the Hon'ble ITAT and the Hon'ble ITAT, Mumbai, 'G' Bench, had vide its Order, dated 10-8-2018 in I.T.A. No. 6099/Mum/2016 dismissed the Appeal of the Department and upheld the order of Commissioner (Appeals), which had deleted the addition made by the assessing officer under section 68 of the Act.