The Tax Publishers2021 TaxPub(DT) 0743 (Ind-Trib) : (2021) 086 ITR (Trib) 0390



ACIT v. Dilip Kumar Mahendra Kumar Jain

ITA No. 809/Ind/2019

9 February, 2021

In favour of assessee.

Appellant by: Mahesh Agrawal, Advocate

Revenue by: Harshit Bari, Sr. Departmental Representative


Manish Borad, A.M.

The above captioned appeal filed at the instance of revenue pertaining to assessment year 2011-12 is directed against the order of Commissioner (Appeals)-3 (in short 'Learned Commissioner'), Bhopal, dated 8-5-2019 which is arising out of the order under section 147 read with section 143(3) of the Income Tax Act 1961(In short the 'Act'), dated 30-11-2018 framed by ACIT Central-1, Indore.

2. Revenue has raised following grounds of appeal :--

1. On the facts and in the circumstances of the case the learned Commissioner (Appeals) erred in deleting the addition of Rs. l,85,72,100 out of total addition of Rs. l,86,00,000 made by assessing officer under section 69 of the Income Tax Act, 1961 without appreciating the fact that their confirmation despite opportunities being the identity, credibility and genuineness of the so called lenders of the funds.

2. On the facts and in the circumstances of the case, tile learned Commissioner (Appeals) erred in deleting the addition of Rs. 2,03,610 made by assessing officer on account of unaccounted interest income and also erred in presumptively holding that the interest was received by lenders despite the fact that the lenders themselves have not given confirmation of providing such loans and have not been produced during the assessment proceedings by the assessee.

3. The brief facts of the case as culled out from the records are that the assessee is a Hindu Undivided Family deriving income from profit and gains from business and profession income from other sources. The appellant filed its Income Tax Return on 11-2-2012 declaring total income of Rs. 4,66,890. A search under section 132 of the Act was conducted in the cases of MRJ group on 23-3-2018 and the assessee being one of the main concerns of this group was also covered. Case selected under section 147 of the Act on the reason that appellant had given loan to various parties in cash. In response to the notices under section 142(1)/143(2) of the Act assessee submitted submissions along with the supporting documents and the re-assessment completed under section 143(3) read with section 147 of the Act on 30-11-2018 assessing income at Rs. 1,92,70,500 adding unexplained investment under section 69 read with section 115BBE at Rs. 1,86,00,000 and unaccounted interest income at Rs. 2,03,610. Aggrieved assessee preferred appeal before learned Commissioner (Appeals) and partly succeeded.

4. Now the Revenue is in appeal before the Tribunal against the finding of learned Commissioner (Appeals) deleting the addition of Rs. 1,85,72,100 and Rs. 2,03,610.

5. Learned Departmental Representative vehemently argued supporting the order of learned assessing officer and contended that the seized material was showing clear nexus of the cash loan given by the assessee.

6. Per contra learned Counsel for the assessee along with placing reliance on the findings of learned Commissioner (Appeals) as well as submissions made before the first appellate authority submitted that the assessee is a finance broker and earns income from brokerage for arranging loans on behalf of lender and borrower. The business was founded by the father of the Karta in the year 1965 and has been consistently carried on by the family. To substantiate this fact reference was made to the statements given during the course of search wherein the assessee has clearly admitted of carrying out business as finance broker and source of income is mainly brokerage/commission. It was also stated that the movement of funds was directly from lend or to the borrower and the appellant acts purely as broker and borrowing and lending took place on member to member basis and all the transactions were carried out through account payee cheque only. It was also submitted that the revenue has failed to establish that the assessee had given cash loan to borrower. For invoking of section 69 of the Act revenue has to prove that the ownership of the investment is of the assessee. In order to discharge its onus assessee had submitted various documents showing that regular transactions of account payee cheque has been carried out between the lenders and borrowers.