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Facts
The assessee received Rs. 20,00,000/- which was treated as an unexplained cash credit under Section 68 of the Income Tax Act. The assessee claimed it was an advance for a property sale, but the Assessing Officer and CIT(A) treated it as an accommodation entry from a shell company involved in providing such entries. An additional amount of Rs. 60,000/- was added on account of commission.
Held
The Tribunal held that the true character of the receipt (loan vs. advance for property) could not be conclusively adjudicated without further examination. Therefore, the issue was restored to the Assessing Officer for de novo adjudication. The addition of Rs. 60,000/- for commission was also restored.
Key Issues
Whether the receipt of Rs. 20,00,000/- was a genuine advance for a property sale or an unexplained cash credit/accommodation entry, and consequently, whether the commission expenditure was allowable.
Sections Cited
68, 69C, 153C, 132, 131
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Income Tax Appellate Tribunal, MUMBAI BENCH “B” MUMBAI
Before: SHRI OM PRAKASH KANT & MS. KAVITHA RAJAGOPAL
ORDER
PER OM PRAKASH KANT, AM
This appeal by the assessee is directed against order dated 30.06.2025 passed by the Ld. Commissioner of Income-tax (Appeals) – 48, Mumbai [in short ‘the Ld. CIT(A)’] for assessment year 2016-17, raising following grounds:
1. On the facts and in the circumstances of the case and in law, the learned CIT (A)-48, Mumbai erred in confirming the addition of Rs. 20,00,000/- on account of unexplained cash credits U/s. 68 of the I.T. Act, 1961 without considering the fact that the appellant has already explained the source of the money with necessary has already explained the source of the money with necessary has already explained the source of the money with necessary evidences, without giving opportunity to cross examine the evidences, without giving opportunity to cross examine the evidences, without giving opportunity to cross examine the evidences relied upon and without considering the fact tha evidences relied upon and without considering the fact tha evidences relied upon and without considering the fact that the same has already been repaid subsequently. The same may same has already been repaid subsequently. The same may same has already been repaid subsequently. The same may please be deleted. please be deleted.
2. On the facts and in the circumstances of the case and in law, 2. On the facts and in the circumstances of the case and in law, 2. On the facts and in the circumstances of the case and in law, learned CIT (A) learned CIT (A)- 48, Mumbai erred in making addition of Rs. 48, Mumbai erred in making addition of Rs. 60,000/-on account of unexplained expenditure U/s. on account of unexplained expenditure U/s. 69C of the on account of unexplained expenditure U/s. I.T. Act, 1961 without considering the fact that the said amount is I.T. Act, 1961 without considering the fact that the said amount is I.T. Act, 1961 without considering the fact that the said amount is not received by the appellant. The same may please be deleted. not received by the appellant. The same may please be deleted. not received by the appellant. The same may please be deleted.
Briefly stated, the assessee filed her return of income on Briefly stated, the assessee filed her return of income on Briefly stated, the assessee filed her return of income on 30.09.2016 declaring a total income of 30.09.2016 declaring a total income of ₹14,47,920/- -. Subsequently, the Assessing Officer initiated proceedings u/s 153C of the Income- the Assessing Officer initiated proceedings u/s 153C of the Assessing Officer initiated proceedings u/s 153C of tax Act, 1961 ("the Act") . tax Act, 1961 ("the Act") .
2.1 The genesis of the proceedings lies in a search conducted u/s The genesis of the proceedings lies in a search conducted u/s The genesis of the proceedings lies in a search conducted u/s 132 of the Act on 22.10.2016 in the case of Shri Ashish Begwani 132 of the Act on 22.10.2016 in the case of Shri Ashish Begwani 132 of the Act on 22.10.2016 in the case of Shri Ashish Begwani and his associates. During the course of the search, it was his associates. During the course of the search, it was his associates. During the course of the search, it was unearthed that Shri Ashish Begwani and entities controlled or unearthed that Shri Ashish Begwani and entities controlled or unearthed that Shri Ashish Begwani and entities controlled or managed by him were engaged in the business of providing managed by him were engaged in the business of providing managed by him were engaged in the business of providing accommodation entries in the nature of unsecured loans, share accommodation entries in the nature of unsecured loans, share accommodation entries in the nature of unsecured loans, share capital and share premium, bogus long premium, bogus long-term capital gains, hawala term capital gains, hawala transactions and routing of unaccounted cash, inter alia, for gutkha transactions and routing of unaccounted cash, inter alia, for gutkha transactions and routing of unaccounted cash, inter alia, for gutkha manufacturers and other traders. Such entries were allegedly manufacturers and other traders. Such entries were allegedly manufacturers and other traders. Such entries were allegedly provided against receipt of unaccounted cash from the beneficiaries, provided against receipt of unaccounted cash from the beneficiaries, provided against receipt of unaccounted cash from the beneficiaries, on which commission was charged and retained in cash, thereby ommission was charged and retained in cash, thereby ommission was charged and retained in cash, thereby facilitating tax evasion by the beneficiaries as well as the entry facilitating tax evasion by the beneficiaries as well as the entry facilitating tax evasion by the beneficiaries as well as the entry operators.
2.2 During the search, certain digital material in the form of Excel During the search, certain digital material in the form of Excel During the search, certain digital material in the form of Excel spreadsheets was seized. The spreadsheets contained details of loan spreadsheets was seized. The spreadsheets contained spreadsheets was seized. The spreadsheets contained entries, including so entries, including so-called "OT" and "CCM" entries, reflecting the called "OT" and "CCM" entries, reflecting the date of receipt of cash, corresponding bank entries, names of the date of receipt of cash, corresponding bank entries, names of the date of receipt of cash, corresponding bank entries, names of the conduit companies controlled by the group, the beneficiaries, and conduit companies controlled by the group, the beneficiaries, and conduit companies controlled by the group, the beneficiaries, and the amounts involved. According to the A the amounts involved. According to the Assessing Officer, these ssessing Officer, these spreadsheets were prepared by Shri Nishant Chhajer at the spreadsheets were prepared by Shri Nishant Chhajer at the spreadsheets were prepared by Shri Nishant Chhajer at the instructions of Shri Ashish Begwani and other Kolkata-based entry instructions of Shri Ashish Begwani and other Kolkata instructions of Shri Ashish Begwani and other Kolkata operators Late Shri Gopal Das Aggarwal and Shri Vikas Aggarwal Late Shri Gopal Das Aggarwal and Shri Vikas Aggarwal Late Shri Gopal Das Aggarwal and Shri Vikas Aggarwal . On being confronted with the excel sheet, S On being confronted with the excel sheet, Shri Nishant Chhajer hri Nishant Chhajer refused to give details of the sheets and claimed that he was unware refused to give details of the sheets and claimed that he was unware refused to give details of the sheets and claimed that he was unware of the contents of the documents. of the contents of the documents. But he stated that he received stated that he received hand written rough noting from Shri Gopal hand written rough noting from Shri Gopal Aggarwal and he simply Aggarwal and he simply typed out the sheets on the instructi typed out the sheets on the instructions of Ashish Begwani ons of Ashish Begwani, which he entered into draft excel format, at his office located at 941, 2nd he entered into draft excel format, at his office located at 941, 2 he entered into draft excel format, at his office located at 941, 2 floor, Arjun Nagar Kotla Mubarakpur, Delhi. floor, Arjun Nagar Kotla Mubarakpur, Delhi. The statements The statements recorded during the search proceedings explained the alleged recorded during the search proceedings explained the alleged recorded during the search proceedings explained the alleged modus operandi of receipt of cash fro modus operandi of receipt of cash from beneficiaries through m beneficiaries through angadias and routing of equivalent amounts through banking angadias and routing of equivalent amounts through banking angadias and routing of equivalent amounts through banking channels in the guise of unsecured loans, with commission channels in the guise of unsecured loans, with commission channels in the guise of unsecured loans, with commission ordinarily charged at about three per cent. ordinarily charged at about three per cent. The brief modus The brief modus operandi of the transaction explained operandi of the transaction explained by the AO is ext by the AO is extracted below:
“The cash is received from the beneficiaries by some angadias on The cash is received from the beneficiaries by some angadias on The cash is received from the beneficiaries by some angadias on instructions of Shri Amit Chaudhary and in turn he provides he instructions of Shri Amit Chaudhary and in turn he provides he instructions of Shri Amit Chaudhary and in turn he provides he equivalent fund in respective bank accounts of beneficiaries in equivalent fund in respective bank accounts of beneficiaries in equivalent fund in respective bank accounts of beneficiaries in form of unsecured loans through non form of unsecured loans through non-descript compa descript companies. I coordinate the process and subsequently commission generally @ coordinate the process and subsequently commission generally @ coordinate the process and subsequently commission generally @ 3% is received by JatinMadani inform of cash. Shri JatinMadani 3% is received by JatinMadani inform of cash. Shri JatinMadani 3% is received by JatinMadani inform of cash. Shri JatinMadani retain 0.3% of such commission and 0.3% is retained by me and retain 0.3% of such commission and 0.3% is retained by me and retain 0.3% of such commission and 0.3% is retained by me and remaining 2.4% is forwarded to Amit Chaudhary. The payment t remaining 2.4% is forwarded to Amit Chaudhary. The payment t remaining 2.4% is forwarded to Amit Chaudhary. The payment to Shri Amit Chaudhary was made through the angadias in Delhi on Shri Amit Chaudhary was made through the angadias in Delhi on Shri Amit Chaudhary was made through the angadias in Delhi on his directions. I do not have the residence details of Shri Amit his directions. I do not have the residence details of Shri Amit his directions. I do not have the residence details of Shri Amit Chaudhary. I have utilized the services of Shri NishantChhajer for Chaudhary. I have utilized the services of Shri NishantChhajer for Chaudhary. I have utilized the services of Shri NishantChhajer for providing me account of such accommodation entries/these providing me account of such accommodation entries/these providing me account of such accommodation entries/these transactions on ex nsactions on excel sheet.” 2.3 On examination of the seized material, the Assessing Officer On examination of the seized material, the Assessing Officer On examination of the seized material, the Assessing Officer noted that one of the Excel sheets contained an entry showing the noted that one of the Excel sheets contained an entry showing the noted that one of the Excel sheets contained an entry showing the assessee as a beneficiary of a sum of assessee as a beneficiary of a sum of ₹22,00,000/- routed through M/s Maa Vaishnavi Pvt. Ltd., an M/s Maa Vaishnavi Pvt. Ltd., an entity alleged to be controlled by entity alleged to be controlled by the Ashish Begwani group. the Ashish Begwani group. On the basis of material and the On the basis of material and the information contained therein the Ld. Assessing Officer following information contained therein the Ld. Assessing Officer following information contained therein the Ld. Assessing Officer following due procedure under the law issued notice u/s 153C of the Act on due procedure under the law issued notice u/s 153C of the Act on due procedure under the law issued notice u/s 153C of the Act on 21.12.2001 . In response, the a In response, the assessee filed a return declaring the ssessee filed a return declaring the same income as returned originally. After issuing statutory notices same income as returned originally. After issuing statutory notices same income as returned originally. After issuing statutory notices and affording opportunity of hearing, the Assessing Officer and affording opportunity of hearing, the Assessing Officer and affording opportunity of hearing, the Assessing Officer completed the assessment under section 153C, treating a sum of completed the assessment under section 153C, treating a sum of completed the assessment under section 153C, treating a sum of ₹20,00,000/- as unexplained as unexplained cash credit under section 68 of the cash credit under section 68 of the Act, being in the nature of an accommodation entry. Act, being in the nature of an accommodation entry.
On appeal, the learned Commissioner of Income On appeal, the learned Commissioner of Income On appeal, the learned Commissioner of Income-tax (Appeals) upheld the action of the Assessing Officer. The appellate authority upheld the action of the Assessing Officer. The appellate authority upheld the action of the Assessing Officer. The appellate authority noted that the addition was founded o noted that the addition was founded on incriminating material n incriminating material seized during the search, including the Excel sheets specifically seized during the search, including the Excel sheets specifically seized during the search, including the Excel sheets specifically naming the assessee as a beneficiary, and the statements recorded naming the assessee as a beneficiary, and the statements recorded naming the assessee as a beneficiary, and the statements recorded during the search explaining the systematic manner in which during the search explaining the systematic manner in which during the search explaining the systematic manner in which Bhavika Ravi Sukhija accommodation entries were provided thr accommodation entries were provided through shell entities. The ough shell entities. The explanation of the assessee that the amount represented a genuine explanation of the assessee that the amount represented a genuine explanation of the assessee that the amount represented a genuine advance towards sale of an under advance towards sale of an under-construction flat was found to be construction flat was found to be unsupported by any contemporaneous and legally enforceable unsupported by any contemporaneous and legally enforceable unsupported by any contemporaneous and legally enforceable document such as an agreement for sale. document such as an agreement for sale. The Commissioner The Commissioner (Appeals) further observed that the mere fact that the lender (Appeals) further observed that the mere fact that the lender (Appeals) further observed that the mere fact that the lender company was legally incorporated and reflected as “active” on the company was legally incorporated and reflected as “active” on the company was legally incorporated and reflected as “active” on the MCA portal did not, by itself, establish the genuineness of the MCA portal did not, by itself, establish the genuineness of the MCA portal did not, by itself, establish the genuineness of the impugned transaction, particularly in the face impugned transaction, particularly in the face of direct material and of direct material and statements indicating that the said entity was used as a conduit for statements indicating that the said entity was used as a conduit for statements indicating that the said entity was used as a conduit for providing accommodation entries. Accordingly, the addition under providing accommodation entries. Accordingly, the addition under providing accommodation entries. Accordingly, the addition under section 68 of the Act, as well as the consequential addition towards section 68 of the Act, as well as the consequential addition towards section 68 of the Act, as well as the consequential addition towards commission expenditure, was c commission expenditure, was confirmed. The relevant finding of ld The relevant finding of ld CIT(A) is reproduced CIT(A) is reproduced as under:
“7.1.2 The appellant contends that the AO erred in making an 7.1.2 The appellant contends that the AO erred in making an 7.1.2 The appellant contends that the AO erred in making an addition of Rs. 20,00,000/ addition of Rs. 20,00,000/- under Section 68 of the Act, without under Section 68 of the Act, without considering that the source of the money was already explained considering that the source of the money was already explained considering that the source of the money was already explained with necessary evidence. The appellant states that the amount of with necessary evidence. The appellant states that the amount of with necessary evidence. The appellant states that the amount of Rs.20,00,000/ Rs.20,00,000/- received from MAA VAISHNAVI VANIJYA PRIVATE received from MAA VAISHNAVI VANIJYA PRIVATE LIMITED on 17/06/2015 was a token amount for selling an under LIMITED on 17/06/2015 was a token amount for selling an under LIMITED on 17/06/2015 was a token amount for selling an under- construction residential flat at Ekta Tripolish, Goregaon (West), construction residential flat at Ekta Tripolish, Goregaon (West), construction residential flat at Ekta Tripolish, Goregaon (West), Mumbai. The appellant claims this is a genuine transaction and has bai. The appellant claims this is a genuine transaction and has bai. The appellant claims this is a genuine transaction and has submitted a copy of a letter dated 14/06/2015 from the party submitted a copy of a letter dated 14/06/2015 from the party submitted a copy of a letter dated 14/06/2015 from the party confirming this. It is further submitted that the deal was kept on confirming this. It is further submitted that the deal was kept on confirming this. It is further submitted that the deal was kept on hold due to abnormal delays in construction by the builder and t hold due to abnormal delays in construction by the builder and t hold due to abnormal delays in construction by the builder and that the project is currently under litigation with MHADA. The appellant the project is currently under litigation with MHADA. The appellant the project is currently under litigation with MHADA. The appellant has also stated an intention to cancel the deal and return the token has also stated an intention to cancel the deal and return the token has also stated an intention to cancel the deal and return the token amount. 7.1.3 The appellant argues that MAA VAISHNAVI VANIJYA 7.1.3 The appellant argues that MAA VAISHNAVI VANIJYA 7.1.3 The appellant argues that MAA VAISHNAVI VANIJYA PRIVATE LIMITED is a legally registered company under the PRIVATE LIMITED is a legally registered company under the PRIVATE LIMITED is a legally registered company under the Companies Act, with an "ACTIVE" status on the MCA portal, and Companies Act, with an "ACTIVE" status on the MCA portal, and Companies Act, with an "ACTIVE" status on the MCA portal, and regularly files financial statements. The appellant asserts that regularly files financial statements. The appellant asserts that regularly files financial statements. The appellant asserts that Bhavika Ravi Sukhija merely because a merely because a third party states that the company is bogus does third party states that the company is bogus does not mean all transactions undertaken by it are bogus, and each not mean all transactions undertaken by it are bogus, and each not mean all transactions undertaken by it are bogus, and each transaction transaction transaction must must must be be be examined examined examined separately separately separately with with facts with facts facts and and and documentation. The appellant claims no knowledge of Shri Ashish documentation. The appellant claims no knowledge of Shri Ashish documentation. The appellant claims no knowledge of Shri Ashish Begwani. The appellant a Begwani. The appellant also pointed out that no search action was lso pointed out that no search action was conducted in the case of MAA VAISHNAVI VANIJYA PRIVATE conducted in the case of MAA VAISHNAVI VANIJYA PRIVATE conducted in the case of MAA VAISHNAVI VANIJYA PRIVATE LIMITED confirming their transactions as bogus. The appellant LIMITED confirming their transactions as bogus. The appellant LIMITED confirming their transactions as bogus. The appellant requested the AO to provide impounded/seized documents, reasons requested the AO to provide impounded/seized documents, reasons requested the AO to provide impounded/seized documents, reasons for issuing notices u/s 153C, and for issuing notices u/s 153C, and an opportunity for cross an opportunity for cross- examination, which were allegedly not provided. The appellant examination, which were allegedly not provided. The appellant examination, which were allegedly not provided. The appellant stated that the AO passed the order without considering the stated that the AO passed the order without considering the stated that the AO passed the order without considering the responses submitted on 19/12/2022. responses submitted on 19/12/2022. 7.1.4 The AO made the addition based on information received 7.1.4 The AO made the addition based on information received 7.1.4 The AO made the addition based on information received following a search in the case of Shri Ashish Begwani and his search in the case of Shri Ashish Begwani and his search in the case of Shri Ashish Begwani and his associates, who were found to be providers of accommodation associates, who were found to be providers of accommodation associates, who were found to be providers of accommodation entries. An excel sheet seized during this search specifically listed entries. An excel sheet seized during this search specifically listed entries. An excel sheet seized during this search specifically listed the appellant as a beneficiary of an accommodation entry of Rs. the appellant as a beneficiary of an accommodation entry of Rs. the appellant as a beneficiary of an accommodation entry of Rs. 20,00,000/- from MAA VAISHNAVI VANIJYA PRIVATE LIMITED. The from MAA VAISHNAVI VANIJYA PRIVATE LIMITED. The from MAA VAISHNAVI VANIJYA PRIVATE LIMITED. The AO noted that these excel sheets were prepared by Shri Nishant AO noted that these excel sheets were prepared by Shri Nishant AO noted that these excel sheets were prepared by Shri Nishant Chhajer on the instructions of Shri Ashish Begwani. Shri Ashish Chhajer on the instructions of Shri Ashish Begwani. Shri Ashish Chhajer on the instructions of Shri Ashish Begwani. Shri Ashish Begwani, in his statement, explained the modus operandi of Begwani, in his statement, explained the modus operandi of Begwani, in his statement, explained the modus operandi of receiving cash from b receiving cash from beneficiaries and providing funds through non eneficiaries and providing funds through non- descript companies as unsecured loans, for which a commission descript companies as unsecured loans, for which a commission descript companies as unsecured loans, for which a commission (generally @3%) was charged. The AO found that MAA VAISHNAVI (generally @3%) was charged. The AO found that MAA VAISHNAVI (generally @3%) was charged. The AO found that MAA VAISHNAVI VANIJYA PRIVATE LIMITED was controlled and managed by the VANIJYA PRIVATE LIMITED was controlled and managed by the VANIJYA PRIVATE LIMITED was controlled and managed by the Ashish Begwani Group and was u Ashish Begwani Group and was used for providing such sed for providing such accommodation entries. accommodation entries. 7.1.5 Crucially, during the search action in the Ashish Begwani 7.1.5 Crucially, during the search action in the Ashish Begwani 7.1.5 Crucially, during the search action in the Ashish Begwani group, a statement of Shri Vikash Agrawal under Section 131 of the group, a statement of Shri Vikash Agrawal under Section 131 of the group, a statement of Shri Vikash Agrawal under Section 131 of the Act was recorded, wherein he stated that MAA VAISHNAVI Act was recorded, wherein he stated that MAA VAISHNAVI Act was recorded, wherein he stated that MAA VAISHNAVI VANIJYA PRIVATE LIMITED VANIJYA PRIVATE LIMITED was a bogus company created for was a bogus company created for giving accommodation entries. An annexure to his statement listed giving accommodation entries. An annexure to his statement listed giving accommodation entries. An annexure to his statement listed MAA VAISHNAVI VANIJYA PRIVATE LIMITED among companies he MAA VAISHNAVI VANIJYA PRIVATE LIMITED among companies he MAA VAISHNAVI VANIJYA PRIVATE LIMITED among companies he confirmed were bogus and shell entities used solely for providing confirmed were bogus and shell entities used solely for providing confirmed were bogus and shell entities used solely for providing accommodation entries. AO by issui accommodation entries. AO by issuing a show-cause notice on cause notice on 10/12/2022 asking for substantial evidence of the genuineness of 10/12/2022 asking for substantial evidence of the genuineness of 10/12/2022 asking for substantial evidence of the genuineness of the transaction, concluded that the transaction was an unexplained the transaction, concluded that the transaction was an unexplained the transaction, concluded that the transaction was an unexplained accommodation entry and thus taxable under Section 68. accommodation entry and thus taxable under Section 68. accommodation entry and thus taxable under Section 68. 7.1.6 The appellant's primary defense revol 7.1.6 The appellant's primary defense revolves around the assertion ves around the assertion that the transaction was a genuine advance for a property sale, that the transaction was a genuine advance for a property sale, that the transaction was a genuine advance for a property sale, supported by a letter from MAA VAISHNAVI VANIJYA PRIVATE supported by a letter from MAA VAISHNAVI VANIJYA PRIVATE supported by a letter from MAA VAISHNAVI VANIJYA PRIVATE LIMITED. However, this explanation must be weighed against the LIMITED. However, this explanation must be weighed against the LIMITED. However, this explanation must be weighed against the substantial evidence unearthed during the searc substantial evidence unearthed during the search operations on h operations on Shri Ashish Begwani and his associates. The discovery of an excel Shri Ashish Begwani and his associates. The discovery of an excel Shri Ashish Begwani and his associates. The discovery of an excel sheet specifically naming the appellant as a beneficiary of an entry sheet specifically naming the appellant as a beneficiary of an entry sheet specifically naming the appellant as a beneficiary of an entry from MAA VAISHNAVI VANIJYA PRIVATE LIMITED, coupled with the from MAA VAISHNAVI VANIJYA PRIVATE LIMITED, coupled with the from MAA VAISHNAVI VANIJYA PRIVATE LIMITED, coupled with the statement of Shri Ashish Begwani detailing t statement of Shri Ashish Begwani detailing the modus operandi of he modus operandi of providing accommodation entries through such companies, casts providing accommodation entries through such companies, casts providing accommodation entries through such companies, casts serious doubt on the genuineness of the transaction. serious doubt on the genuineness of the transaction. 7.1.7 Furthermore, the statement of Shri Vikash Agrawal, a director 7.1.7 Furthermore, the statement of Shri Vikash Agrawal, a director 7.1.7 Furthermore, the statement of Shri Vikash Agrawal, a director in MAA VAISHNAVI VANIJYA PRIVATE LIMITED, unequivoca in MAA VAISHNAVI VANIJYA PRIVATE LIMITED, unequivoca in MAA VAISHNAVI VANIJYA PRIVATE LIMITED, unequivocally identifies this company as a "bogus and shell entity" used for identifies this company as a "bogus and shell entity" used for identifies this company as a "bogus and shell entity" used for providing accommodation entries. This direct admission from an providing accommodation entries. This direct admission from an providing accommodation entries. This direct admission from an insider involved with the company significantly undermines the insider involved with the company significantly undermines the insider involved with the company significantly undermines the appellant's claim of a genuine business transaction and the appellant's claim of a genuine business transaction and the appellant's claim of a genuine business transaction and the evidentiary value of the letter dated 14/06/2015. dentiary value of the letter dated 14/06/2015. 7.1.8 The appellant's arguments regarding the legal registration and 7.1.8 The appellant's arguments regarding the legal registration and 7.1.8 The appellant's arguments regarding the legal registration and "ACTIVE" MCA status of MAA VAISHNAVI VANIJYA PRIVATE "ACTIVE" MCA status of MAA VAISHNAVI VANIJYA PRIVATE "ACTIVE" MCA status of MAA VAISHNAVI VANIJYA PRIVATE LIMITED do not, in themselves, prove the genuineness of this LIMITED do not, in themselves, prove the genuineness of this LIMITED do not, in themselves, prove the genuineness of this specific transaction. It i specific transaction. It is common for entities engaged in providing s common for entities engaged in providing accommodation entries to maintain a basic level of legal compliance accommodation entries to maintain a basic level of legal compliance accommodation entries to maintain a basic level of legal compliance to mask their actual activities. The specific intelligence and direct to mask their actual activities. The specific intelligence and direct to mask their actual activities. The specific intelligence and direct statements gathered during the search are more pertinent to the statements gathered during the search are more pertinent to the statements gathered during the search are more pertinent to the nature of this transaction than the general MCA status. his transaction than the general MCA status. his transaction than the general MCA status. 7.1.9 The claims of construction delays and the intention to return 7.1.9 The claims of construction delays and the intention to return 7.1.9 The claims of construction delays and the intention to return the money are subsequent events that do not alter the nature of the the money are subsequent events that do not alter the nature of the the money are subsequent events that do not alter the nature of the receipt at the time it occurred. The onus is on the appellant to prove receipt at the time it occurred. The onus is on the appellant to prove receipt at the time it occurred. The onus is on the appellant to prove the identity, creditworthiness of the creditor, and the genuineness of identity, creditworthiness of the creditor, and the genuineness of identity, creditworthiness of the creditor, and the genuineness of the transaction to the satisfaction of the AO, which, in light of the the transaction to the satisfaction of the AO, which, in light of the the transaction to the satisfaction of the AO, which, in light of the overwhelming contrary evidence from the search, has not been met. overwhelming contrary evidence from the search, has not been met. overwhelming contrary evidence from the search, has not been met. The AO's order indicates that the appellant's submiss The AO's order indicates that the appellant's submiss The AO's order indicates that the appellant's submissions were considered, but found insufficient against the evidence pointing considered, but found insufficient against the evidence pointing considered, but found insufficient against the evidence pointing towards it being an accommodation entry. towards it being an accommodation entry. 7.1.10 To substantiate the claim that the Rs. 20,00,000 received 7.1.10 To substantiate the claim that the Rs. 20,00,000 received 7.1.10 To substantiate the claim that the Rs. 20,00,000 received was a genuine advance for a future property sale, the appellant, was a genuine advance for a future property sale, the appellant, was a genuine advance for a future property sale, the appellant, Smt. Bhavika Ravi Sukhija, should have ideally provided a ika Ravi Sukhija, should have ideally provided a ika Ravi Sukhija, should have ideally provided a combination of legally recognized following documents that combination of legally recognized following documents that combination of legally recognized following documents that establish the intent, agreement, and terms of such a transaction. establish the intent, agreement, and terms of such a transaction. establish the intent, agreement, and terms of such a transaction. 7.1.11 Agreement for Sale (Registered or Notarized): This is the most 7.1.11 Agreement for Sale (Registered or Notarized): This is the most 7.1.11 Agreement for Sale (Registered or Notarized): This is the most crucial document. An Agreement for Sale would typically detail: ment. An Agreement for Sale would typically detail: ment. An Agreement for Sale would typically detail: Names and details of the seller (appellant) and the buyer Names and details of the seller (appellant) and the buyer Names and details of the seller (appellant) and the buyer (MAA VAISHNAVI VANIJYA PRIVATE LIMITED). (MAA VAISHNAVI VANIJYA PRIVATE LIMITED). Complete description of the property being sold (including its Complete description of the property being sold (including its Complete description of the property being sold (including its status as under status as under- construction). Total sale Total sale consideration.
The amount received as advance or token money (Rs. The amount received as advance or token money (Rs. The amount received as advance or token money (Rs. 20,00,000 in this case). 20,00,000 in this case). Terms and conditions of the sale, including timelines for Terms and conditions of the sale, including timelines for Terms and conditions of the sale, including timelines for future payments and completion of the sale. future payments and completion of the sale. Clauses regarding forfeiture or refund of the advance in case Clauses regarding forfeiture or refund of the advance in case Clauses regarding forfeiture or refund of the advance in case of non- - completion. Signatures of both parties and witnesses. Signatures of both parties and witnesses. While registration is ideal for enforceability, even a notarized While registration is ideal for enforceability, even a notarized While registration is ideal for enforceability, even a notarized agreement would lend more credence than a simple letter. agreement would lend more credence than a simple letter. agreement would lend more credence than a simple letter. Correspondence with the Buyer: Any formal communication Correspondence with the Buyer: Any formal communication Correspondence with the Buyer: Any formal communication (emails, letters (emails, letters) between the appellant and MAA VAISHNAVI ) between the appellant and MAA VAISHNAVI VANIJYA PRIVATE LIMITED regarding the property sale, VANIJYA PRIVATE LIMITED regarding the property sale, VANIJYA PRIVATE LIMITED regarding the property sale, negotiations, terms, reason for payment, etc., preferably negotiations, terms, reason for payment, etc., preferably negotiations, terms, reason for payment, etc., preferably exchanged around the time of the transaction. exchanged around the time of the transaction. Resolution by the Buyer (if a company): If the buyer is a Resolution by the Buyer (if a company): If the buyer is a Resolution by the Buyer (if a company): If the buyer is a company like MAA VAISHNAVI VANIJYA PRIVATE LIMITED, company like MAA VAISHNAVI VANIJYA PRIVATE LIMITED, company like MAA VAISHNAVI VANIJYA PRIVATE LIMITED, a board resolution authorizing the purchase of the property a board resolution authorizing the purchase of the property a board resolution authorizing the purchase of the property and payment of the advance would be a strong supporting and payment of the advance would be a strong supporting and payment of the advance would be a strong supporting document. document. 7.1.12 The appellant has argued that the "said amount of Rs. 7.1.12 The appellant has argued that the "said amount of Rs. 7.1.12 The appellant has argued that the "said amount of Rs. 20,00,000/- still exists in my books". While this indicates an l exists in my books". While this indicates an accounting entry, it is not a legal document proving the nature of the accounting entry, it is not a legal document proving the nature of the accounting entry, it is not a legal document proving the nature of the transaction with the third party. transaction with the third party. 7.1.13 The primary document submitted by the appellant to support 7.1.13 The primary document submitted by the appellant to support 7.1.13 The primary document submitted by the appellant to support her claim appears to be a letter dated her claim appears to be a letter dated 14/06/2015 from MAA 14/06/2015 from MAA VAISHNAVI VANIJYA PRIVATE LIMITED. VAISHNAVI VANIJYA PRIVATE LIMITED. 7.1.14 While this letter might state the intention of the transaction, it 7.1.14 While this letter might state the intention of the transaction, it 7.1.14 While this letter might state the intention of the transaction, it falls short of the robustness of an "Agreement for Sale." An falls short of the robustness of an "Agreement for Sale." An falls short of the robustness of an "Agreement for Sale." An Agreement for Sale would have more detailed terms and legal Agreement for Sale would have more detailed terms and legal Agreement for Sale would have more detailed terms and legal standing. The AO gave this letter limited evidentiary value, ing. The AO gave this letter limited evidentiary value, ing. The AO gave this letter limited evidentiary value, especially in light of the substantial contrary evidence suggesting especially in light of the substantial contrary evidence suggesting especially in light of the substantial contrary evidence suggesting MAA VAISHNAVI VANIJYA PRIVATE LIMITED was a shell entity MAA VAISHNAVI VANIJYA PRIVATE LIMITED was a shell entity MAA VAISHNAVI VANIJYA PRIVATE LIMITED was a shell entity involved in providing accommodation entries. The reliance was involved in providing accommodation entries. The reliance was involved in providing accommodation entries. The reliance was primarily on primarily on the letter from the buying party, which, given the the letter from the buying party, which, given the circumstances and the alleged nature of the buyer, was insufficient circumstances and the alleged nature of the buyer, was insufficient circumstances and the alleged nature of the buyer, was insufficient to overcome the AO's findings based on the search and seizure to overcome the AO's findings based on the search and seizure to overcome the AO's findings based on the search and seizure operations. 7.1.15 The appellant's contention about not knowing Shri Ashish 7.1.15 The appellant's contention about not knowing Shri Ashish 7.1.15 The appellant's contention about not knowing Shri Ashish Begwani is not material, as such entry networks often involve Begwani is not material, as such entry networks often involve Begwani is not material, as such entry networks often involve multiple layers of intermediaries. The absence of a separate search multiple layers of intermediaries. The absence of a separate search multiple layers of intermediaries. The absence of a separate search on MAA VAISHNAVI VANIJYA PRIVATE LIMITED does not invalidate on MAA VAISHNAVI VANIJYA PRIVATE LIMITED does not invalidate on MAA VAISHNAVI VANIJYA PRIVATE LIMITED does not invalidate the findings derived from the search on the main operator, Shri the findings derived from the search on the main operator, Shri the findings derived from the search on the main operator, Shri Ashish Begwani, who controlled and managed such entities for Ashish Begwani, who controlled and managed such entities for Ashish Begwani, who controlled and managed such entities for Bhavika Ravi Sukhija providing accommodation entries. The core evidence, including the providing accommodation entries. The core evidence, including the providing accommodation entries. The core evidence, including the excel sheet detailing the appellant's transaction and the statements excel sheet detailing the appellant's transaction and the statements excel sheet detailing the appellant's transaction and the statements of key persons involved, forms a direct nexus to the appella of key persons involved, forms a direct nexus to the appella of key persons involved, forms a direct nexus to the appellant's transaction. 7.1.16 The AO has relied upon credible information and seized 7.1.16 The AO has relied upon credible information and seized 7.1.16 The AO has relied upon credible information and seized material from a search action that implicated MAA VAISHNAVI material from a search action that implicated MAA VAISHNAVI material from a search action that implicated MAA VAISHNAVI VANIJYA PRIVATE LIMITED as a shell company providing VANIJYA PRIVATE LIMITED as a shell company providing VANIJYA PRIVATE LIMITED as a shell company providing accommodation entries and the appellant as a beneficiary. accommodation entries and the appellant as a beneficiary. accommodation entries and the appellant as a beneficiary. 7.1.17 Therefore, Ground No. 1 is dismissed, and the addition of Rs. 7 Therefore, Ground No. 1 is dismissed, and the addition of Rs. 7 Therefore, Ground No. 1 is dismissed, and the addition of Rs. 20,00,000/- under Section 68 is upheld. under Section 68 is upheld. 7.2 Decision on Ground No.2: In Ground No.2, the appellant has 7.2 Decision on Ground No.2: In Ground No.2, the appellant has 7.2 Decision on Ground No.2: In Ground No.2, the appellant has challenged the addition of Rs. 60,000/ challenged the addition of Rs. 60,000/- under Section 69C of the under Section 69C of the I.T. Act, 1961. I.T. Act, 1961. 7.2.1 The appellant argues that the AO erred in making an addition e appellant argues that the AO erred in making an addition e appellant argues that the AO erred in making an addition of Rs. 60,000/ of Rs. 60,000/- on account of unexplained expenditure under on account of unexplained expenditure under Section 69C, asserting that this amount, purported to be Section 69C, asserting that this amount, purported to be Section 69C, asserting that this amount, purported to be commission, was never paid by the appellant. The appellant states commission, was never paid by the appellant. The appellant states commission, was never paid by the appellant. The appellant states this addition is baseless as the main transaction of Rs. 20,00,000/ is baseless as the main transaction of Rs. 20,00,000/ is baseless as the main transaction of Rs. 20,00,000/- was genuine and not an accommodation entry. The appellant claims was genuine and not an accommodation entry. The appellant claims was genuine and not an accommodation entry. The appellant claims the addition is based merely on wrong information from a third the addition is based merely on wrong information from a third the addition is based merely on wrong information from a third party, ignoring documentary evidence. party, ignoring documentary evidence. 7.2.2 The AO made the addition of R 7.2.2 The AO made the addition of Rs. 60,000/- as unexplained as unexplained expenditure under Section 69C, calculating it as commission paid expenditure under Section 69C, calculating it as commission paid expenditure under Section 69C, calculating it as commission paid @3% on the accommodation entry of Rs. 20,00,000/ @3% on the accommodation entry of Rs. 20,00,000/ @3% on the accommodation entry of Rs. 20,00,000/-. This was based on the modus operandi explained by Shri Ashish Begwani based on the modus operandi explained by Shri Ashish Begwani based on the modus operandi explained by Shri Ashish Begwani during the post during the post-search investigation, wherein he stated that a in he stated that a commission (generally @3%) was received in cash for providing such commission (generally @3%) was received in cash for providing such commission (generally @3%) was received in cash for providing such entries. Since the primary transaction was treated as an entries. Since the primary transaction was treated as an entries. Since the primary transaction was treated as an unexplained cash credit, the related commission for facilitating this unexplained cash credit, the related commission for facilitating this unexplained cash credit, the related commission for facilitating this entry was considered unexplained expenditu entry was considered unexplained expenditure. 7.2.3 Given the decision on Ground No. 1, where the transaction of 7.2.3 Given the decision on Ground No. 1, where the transaction of 7.2.3 Given the decision on Ground No. 1, where the transaction of Rs. 20,00,000/ Rs. 20,00,000/- has been upheld as an unexplained cash credit in has been upheld as an unexplained cash credit in the nature of an accommodation entry, the basis of the appellant's the nature of an accommodation entry, the basis of the appellant's the nature of an accommodation entry, the basis of the appellant's argument for this ground (i.e., the genuineness of th argument for this ground (i.e., the genuineness of th argument for this ground (i.e., the genuineness of the primary transaction) is not tenable. transaction) is not tenable. 7.2.4 The modus operandi of accommodation entry providers, as 7.2.4 The modus operandi of accommodation entry providers, as 7.2.4 The modus operandi of accommodation entry providers, as detailed in the assessment order based on the statement of Shri detailed in the assessment order based on the statement of Shri detailed in the assessment order based on the statement of Shri Ashish Begwani, typically involves the payment of a commission in Ashish Begwani, typically involves the payment of a commission in Ashish Begwani, typically involves the payment of a commission in cash by the beneficiary cash by the beneficiary to the provider of such entries. The rate of to the provider of such entries. The rate of 3% is specifically mentioned as the general commission rate. While 3% is specifically mentioned as the general commission rate. While 3% is specifically mentioned as the general commission rate. While direct evidence of cash commission payment might be difficult to direct evidence of cash commission payment might be difficult to direct evidence of cash commission payment might be difficult to obtain in such clandestine arrangements, the inference of such obtain in such clandestine arrangements, the inference of such obtain in such clandestine arrangements, the inference of such expenditure is a expenditure is a natural corollary once the main transaction is natural corollary once the main transaction is established as an accommodation entry. The excel sheet itself, established as an accommodation entry. The excel sheet itself, established as an accommodation entry. The excel sheet itself, which detailed these financial movements, was part of a system which detailed these financial movements, was part of a system which detailed these financial movements, was part of a system where commissions were an integral component. where commissions were an integral component. 7.2.5 The AO's action in estimating 7.2.5 The AO's action in estimating the commission expenditure is the commission expenditure is based on the evidence gathered during the search and the based on the evidence gathered during the search and the based on the evidence gathered during the search and the consistent pattern of such transactions. The appellant's denial of consistent pattern of such transactions. The appellant's denial of consistent pattern of such transactions. The appellant's denial of paying any commission is a self paying any commission is a self-serving statement especially when serving statement especially when the primary transaction itself has b the primary transaction itself has been found to be non een found to be non-genuine. The addition under Section 69C is consequential to the finding that The addition under Section 69C is consequential to the finding that The addition under Section 69C is consequential to the finding that the amount of Rs. 20,00,000/ the amount of Rs. 20,00,000/- was an accommodation entry. was an accommodation entry.”
Before us, the learned counsel for the assessee filed a paper he learned counsel for the assessee filed a paper he learned counsel for the assessee filed a paper book containing pages 1 to 22, containing a provisional booking book containing pages 1 to 22, containing a provisional booking book containing pages 1 to 22, containing a provisional booking letter relating to a flat in the project “Ekta Tripolish”, Goregaon, and letter relating to a flat in the project “Ekta Tripolish”, Goregaon, and letter relating to a flat in the project “Ekta Tripolish”, Goregaon, and a copy of the registered deed dated 21.04.2016. The Assessing a copy of the registered deed dated 21.04.2016. The Assessing a copy of the registered deed dated 21.04.2016. The Assessing Officer proceeded on the basis of information emanating from a proceeded on the basis of information emanating from a proceeded on the basis of information emanating from a search conducted in the case of Shri Ashish Begwani and his search conducted in the case of Shri Ashish Begwani and his search conducted in the case of Shri Ashish Begwani and his associates, wherein it was revealed that entities controlled by the associates, wherein it was revealed that entities controlled by the associates, wherein it was revealed that entities controlled by the said group were engaged in providing accommodation entries in the said group were engaged in providing accommodation entries in the said group were engaged in providing accommodation entries in the guise of unsecured loans. According to the Assessing Officer, the of unsecured loans. According to the Assessing Officer, the of unsecured loans. According to the Assessing Officer, the assessee was a beneficiary of such an accommodation entry of assessee was a beneficiary of such an accommodation entry of assessee was a beneficiary of such an accommodation entry of ₹20,00,000/- routed through M/s Maa Vaishnavi Pvt. Ltd., an routed through M/s Maa Vaishnavi Pvt. Ltd., an routed through M/s Maa Vaishnavi Pvt. Ltd., an entity alleged to be controlled and operated by the said group. entity alleged to be controlled and operated by the said group. entity alleged to be controlled and operated by the said group.
4.1 The assessee does not dispute the receipt of the said amount essee does not dispute the receipt of the said amount essee does not dispute the receipt of the said amount from M/s Maa Vaishnavi Pvt. Ltd.; however, the consistent stand of from M/s Maa Vaishnavi Pvt. Ltd.; however, the consistent stand of from M/s Maa Vaishnavi Pvt. Ltd.; however, the consistent stand of the assessee is that the amount was not a loan but an advance the assessee is that the amount was not a loan but an advance the assessee is that the amount was not a loan but an advance received against the proposed sale of a residential flat, namely Flat received against the proposed sale of a residential flat, namely Flat received against the proposed sale of a residential flat, namely Flat No. B-506 in the project “Ekta Tripolish”, Goregaon, Mumbai. In 506 in the project “Ekta Tripolish”, Goregaon, Mumbai. In 506 in the project “Ekta Tripolish”, Goregaon, Mumbai. In support of this contention, reliance has been placed on a letter support of this contention, reliance has been placed on a letter support of this contention, reliance has been placed on a letter purportedly issued by a Director of M/s Maa Vaishnavi Pvt. Ltd. purportedly issued by a Director of M/s Maa Vaishnavi Pvt. Ltd. purportedly issued by a Director of M/s Maa Vaishnavi Pvt. Ltd. stating that the flat was agreed to be purchased for a consideration stating that the flat was agreed to be purchased for a considerati stating that the flat was agreed to be purchased for a considerati of ₹2 crores and that a token amount of Rs. 20 lakhs was paid to 2 crores and that a token amount of Rs. 20 lakhs was paid to 2 crores and that a token amount of Rs. 20 lakhs was paid to the assessee. The assessee has also produced certain e-mail the assessee. The assessee has also produced certain e the assessee. The assessee has also produced certain e correspondence exchanged in the year 2024 regarding cancellation correspondence exchanged in the year 2024 regarding cancellation correspondence exchanged in the year 2024 regarding cancellation of the proposed transaction and refund of the amount, along with a of the proposed transaction and refund of the amount, along wi of the proposed transaction and refund of the amount, along wi letter dated 05.08.2024 seeking such refund. letter dated 05.08.2024 seeking such refund. The assessee in his The assessee in his paper book pages 7 and 8 has shown that said amount was paper book pages 7 and 8 has shown that said amount was paper book pages 7 and 8 has shown that said amount was refunded by way of bank transaction to Maa Vaishnavi. In the refunded by way of bank transaction to Maa Vaishnavi. refunded by way of bank transaction to Maa Vaishnavi. nutshell , the assessee has claimed that said amount was not loan , the assessee has claimed that said amount was not loan , the assessee has claimed that said amount was not loan and assessee merely an advance against sale of property. assessee merely an advance against sale of property. assessee merely an advance against sale of property.
4.2 The learned Departmental Representative, on the other hand, The learned Departmental Representative, on the other hand, The learned Departmental Representative, on the other hand, has seriously disputed the credibility of the aforesaid documents. It has seriously disputed the credibility of the aforesaid documents. It has seriously disputed the credibility of the aforesaid documents. It was was was contended contended contended that that that no no no contemporaneous contemporaneous contemporaneous correspondence correspondence correspondence evidencing negotiation or agreement for purchase of the property otiation or agreement for purchase of the property otiation or agreement for purchase of the property has been produced. It was emphasised that the e has been produced. It was emphasised that the e-mails relied upon mails relied upon pertain to the year 2024, whereas the property itself stood pertain to the year 2024, whereas the property itself stood pertain to the year 2024, whereas the property itself stood registered in the assessee’s name as early as 2016. According to the registered in the assessee’s name as early as 2016. According to the registered in the assessee’s name as early as 2016. According to the Revenue, it is inherently improbable that a substantial advance of t is inherently improbable that a substantial advance of t is inherently improbable that a substantial advance of ₹20,00,000/- would be paid without any agreement for sale and would be paid without any agreement for sale and would be paid without any agreement for sale and that refund would be sought after an inordinate lapse of time of that refund would be sought after an inordinate lapse of time of that refund would be sought after an inordinate lapse of time of nearly a decade. It was therefore submitted that the assessee has nearly a decade. It was therefore submitted that the assessee has nearly a decade. It was therefore submitted that the assessee has Bhavika Ravi Sukhija failed to discharge the burden of proving that the receipt was to discharge the burden of proving that the receipt was to discharge the burden of proving that the receipt was anything other than a loan in the nature of an accommodation anything other than a loan in the nature of an accommodation anything other than a loan in the nature of an accommodation entry.
We have considered the rival submissions in the light of the We have considered the rival submissions in the light of the We have considered the rival submissions in the light of the material on record. The core issue that arises for our determination material on record. The core issue that arises for our determinatio material on record. The core issue that arises for our determinatio is whether the sum of ₹20,00,000/- received by the assessee from is whether the sum of received by the assessee from M/s Maa Vaishnavi Pvt. Ltd. was in the nature of a loan or M/s Maa Vaishnavi Pvt. Ltd. was in the nature of a loan or M/s Maa Vaishnavi Pvt. Ltd. was in the nature of a loan or constituted an advance against the proposed sale of immovable constituted an advance against the proposed sale of immovable constituted an advance against the proposed sale of immovable property. This distinction is of material significance, as in the property. This distinction is of material significance, as in the property. This distinction is of material significance, as in the former case the onus squarely lies on the assessee to satisfy the rmer case the onus squarely lies on the assessee to satisfy the rmer case the onus squarely lies on the assessee to satisfy the requirements of section 68 of the Act, whereas in the latter case the requirements of section 68 of the Act, whereas in the latter case the requirements of section 68 of the Act, whereas in the latter case the receipt would partake the character of a business or capital receipt would partake the character of a business or capital receipt would partake the character of a business or capital transaction, subject to its genuineness being established. transaction, subject to its genuineness being established. transaction, subject to its genuineness being established.
5.1 During the course of hearing, the learned counsel for the During the course of hearing, the learned counsel for the During the course of hearing, the learned counsel for the assessee was specifically called upon to place on record the assessee was specifically called upon to place on record the assessee was specifically called upon to place on record the financial statements of M/s Maa Vaishnavi Pvt. Ltd. to demonstrate financial statements of M/s Maa Vaishnavi Pvt. Ltd. to demonstrate financial statements of M/s Maa Vaishnavi Pvt. Ltd. to demonstrate whether the impugned amount was reflected therein as an advance whether the impugned amount was reflected therein as an advance whether the impugned amount was reflected therein as an advance for purchase of property or as a loan. The assessee was also asked purchase of property or as a loan. The assessee was also asked purchase of property or as a loan. The assessee was also asked to furnish any contemporaneous document such as a board to furnish any contemporaneous document such as a board to furnish any contemporaneous document such as a board resolution of the said company authorising the purchase of the resolution of the said company authorising the purchase of the resolution of the said company authorising the purchase of the property and payment of advance. No such evidence was produced property and payment of advance. No such evidence was produced property and payment of advance. No such evidence was produced at this stage. The learned counsel, however, submitted that the age. The learned counsel, however, submitted that the age. The learned counsel, however, submitted that the assessee would be in a position to place such material on record if assessee would be in a position to place such material on record if assessee would be in a position to place such material on record if one more opportunity were granted. one more opportunity were granted.
5.2 In the facts and circumstances of the case, and having regard In the facts and circumstances of the case, and having regard In the facts and circumstances of the case, and having regard to the nature of the dispute, we to the nature of the dispute, we are of the considered view that the are of the considered view that the issue issue issue cannot cannot cannot be be be conclusively conclusively conclusively adjudicated adjudicated adjudicated without without without proper proper proper examination of the aforesaid aspects. The determination of the true examination of the aforesaid aspects. The determination of the true examination of the aforesaid aspects. The determination of the true character of the receipt character of the receipt—whether as a loan or as an advance whether as a loan or as an advance against property—goes to the very ro goes to the very root of the addition made under ot of the addition made under section 68 of the Act. In the interest of justice, therefore, it would be section 68 of the Act. In the interest of justice, therefore, it would be section 68 of the Act. In the interest of justice, therefore, it would be appropriate to afford the assessee one final opportunity to appropriate to afford the assessee one final opportunity to appropriate to afford the assessee one final opportunity to substantiate its claim by producing cogent and contemporaneous substantiate its claim by producing cogent and contemporaneous substantiate its claim by producing cogent and contemporaneous evidence, including but not l evidence, including but not limited to the financial statements of imited to the financial statements of the payer company, board resolutions, agreements, and relevant the payer company, board resolutions, agreements, and relevant the payer company, board resolutions, agreements, and relevant correspondence.
5.3 Accordingly, the issue relating to the addition of Accordingly, the issue relating to the addition of Accordingly, the issue relating to the addition of ₹20,00,000/- is restored to the file of the Assessing Officer for de novo is restored to the file of the Assessing Officer for is restored to the file of the Assessing Officer for on in accordance with law. The Assessing Officer shall be adjudication in accordance with law The Assessing Officer shall be at liberty to conduct conduct conduct such such such enquiries, enquiries, enquiries, verifications, verifications, verifications, and and and investigations as may be considered necessary or expedient for investigations as may be considered necessary or expedient investigations as may be considered necessary or expedient proper determination of the true nature and character of the proper determination of the true nature and character of the proper determination of the true nature and character of the impugned receipt, including examination of books of account, including examination of books of account, including examination of books of account, financial statements, bank records, agreements, resolutions, financial statements, bank records, agreements, resolutions, financial statements, bank records, agreements, resolutions, electronic correspondence, and any other material, whether already electronic correspondence, and any other material, whether already electronic correspondence, and any other material, whether already on record or brought on record during the remand proceedings. on record or brought on record during the remand proceedings. on record or brought on record during the remand proceedings.
5.4 The Assessing Offi The Assessing Officer shall also be at liberty to cer shall also be at liberty to draw such lawful inferences as may arise from the material available on lawful inferences as may arise from the material available on lawful inferences as may arise from the material available on record, subject, however, to affording the assessee subject, however, to affording the assessee adequate and subject, however, to affording the assessee effective opportunity of being heard effective opportunity of being heard, including access to and including access to and confrontation with all ma confrontation with all material relied upon. The issue shall be terial relied upon. The issue shall be decided uninfluenced by the earlier findings uninfluenced by the earlier findings and by passing a and by passing a reasoned and speaking order reasoned and speaking order.
5.5 Since the addition of Since the addition of ₹60,000/- under section 69C of the Act under section 69C of the Act towards alleged commission expenditure is consequential and towards alleged commission expenditure is consequential and towards alleged commission expenditure is consequential and intrinsically linked to the determination of the nature of the primary ntrinsically linked to the determination of the nature of the primary ntrinsically linked to the determination of the nature of the primary receipt of ₹20,00,000/ 20,00,000/-, the same is also restored to the file of the , the same is also restored to the file of the Assessing Officer to be decided afresh in accordance with the Assessing Officer to be decided afresh in accordance with the Assessing Officer to be decided afresh in accordance with the outcome of the proceedings on the main issue. outcome of the proceedings on the main issue.
5.6 The grounds of appeal of the assessee are allowed for grounds of appeal of the assessee are allowed for grounds of appeal of the assessee are allowed for statistical purposes. statistical purposes.
In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for statistical purposes.