GOODLUCK METAL CORPORATION,MUMBAI vs. ASSESSING OFFICER, MUMBAI

4. On the facts and in law, the Ld. CTT (A) erred upholding the On the facts and in law, the Ld. CTT (A) erred upholding the On the facts and in law, the Ld. CTT (A) erred upholding the disallowance of interest of Rs. 6904 on loan received from disallowance of interest of Rs. 6904 on loan received from disallowance of interest of Rs. 6904 on loan received from Rose Impex by treating the said loan as non Rose Impex by treating the said loan as non-genuine. genuine.

5. Appellant prays for leave to add, amend or delete Appellant prays for leave to add, amend or delete any Appellant prays for leave to add, amend or delete ground/s of appeal on or before the final date of hearing. ground/s of appeal on or before the final date of hearing. ground/s of appeal on or before the final date of hearing.

6. On the facts and in law, the Ld. CIT(A) erred in upholding On the facts and in law, the Ld. CIT(A) erred in upholding On the facts and in law, the Ld. CIT(A) erred in upholding and not taking into consideration the f and not taking into consideration the fact that once a search act that once a search action u/ action u/s 132 forms the foundation of a case, the Revenue, s 132 forms the foundation of a case, the Revenue, for assessin for assessing the total income, must proceed u/s 153A/153C g the total income, must proceed u/s 153A/153C of of of the the the Income Income Income Tax Tax Tax Act, Act, Act, rather rather rather than than than invoking invoking invoking reassessment reassessment u/s 147/148 2. Briefly stated, facts of the case are that the assessee filed its Briefly stated, facts of the case are that the assessee filed its Briefly stated, facts of the case are that the assessee filed its return of income electronically on 30.09.2009 declaring total loss of return of income electronically on 30.09.2009 declaring total loss of return of income electronically on 30.09.2009 declaring total loss of Rs.29,49,289/. The return of income was processed u/s 143(1) of s.29,49,289/. The return of income was processed u/s 143(1) of s.29,49,289/. The return of income was processed u/s 143(1) of the Income-tax Act, 1961 (in short ‘the Act’). tax Act, 1961 (in short ‘the Act’).

2.1 Subsequently, information information was received on the basis of search received on the basis of search and seizure action carried out by the Income and seizure action carried out by the Income-tax Department in the tax Department in the case of Shri Bhawarlal Jain Bhawarlal Jain/Sh. Rajendra Jain /Sh. Rajendra Jain that assessee received accommodation entry of Rs.35 lakhs from M/s Rose Impex, received accommodation entry of Rs.35 lakhs from M/s Rose Impex received accommodation entry of Rs.35 lakhs from M/s Rose Impex who was an entity operated and managed by Shri Bhawarlal Jain who was an entity operated and managed by Shri Bhawarlal Jain who was an entity operated and managed by Shri Bhawarlal Jain and his sons for providing accommodation entries. In view of for providing accommodation entries. In view of for providing accommodation entries. In view of information, the Assessing Officer recorded reasons to believe that essing Officer recorded reasons to believe that essing Officer recorded reasons to believe that income escaped assessment and accordingly issued notice u/s 148 income escaped assessment and accordingly issued notice u/s 148 income escaped assessment and accordingly issued notice u/s 148 of the Act on 28.03.2016. The Assessing Officer disposed off of the Act on 28.03.2016. The Assessing Officer disposed off of the Act on 28.03.2016. The Assessing Officer disposed off objection raised by the assessee to objection raised by the assessee to the notice u/s 148 of the Act notice u/s 148 of the Act and thereafter commenced reassessment proceedings. During the mmenced reassessment proceedings. During the mmenced reassessment proceedings. During the reassessment proceedings, the Assessing Officer brought to the reassessment proceedings, the Assessing Officer brought to the reassessment proceedings, the Assessing Officer brought to the knowledge of the assessee the factual observations made during the knowledge of the assessee the factual observations made during the knowledge of the assessee the factual observations made during the course of search on Shri Bhawarlal Jain course of search on Shri Bhawarlal Jain interalia interalia; (i) in various concerns controlled and operated by Shri Bhawarlal Jain/Rajendra controlled and operated by Shri Bhawarlal Jain/Rajendra controlled and operated by Shri Bhawarlal Jain/Rajendra Jain for name sake/dummy director sake/dummy director, partnes/proprietors were /proprietors were made, (ii) those directors made, (ii) those directors; partners and proprietors were family and proprietors were family members of Shri Bhawarlal Jain/Rejendra Jain and relative members of Shri Bhawarlal Jain/Rejendra Jain and members of Shri Bhawarlal Jain/Rejendra Jain and including Shri Sachin Pareek and Shri Manish Jain and Anup Jain, chin Pareek and Shri Manish Jain and Anup Jain, chin Pareek and Shri Manish Jain and Anup Jain, (iii) the examination on oath (iii) the examination on oath of name sake/dummy directors name sake/dummy directors, partners, proprietors proprietors revealed that they were em that they were employees of Shri Bhawarlal Jain/Shri Rajendra Jain and were looking after from Shri Rajendra Jain and were looking after from Shri Rajendra Jain and were looking after from miscellaneous office w miscellaneous office work like depositing cheques in banks, ork like depositing cheques in banks, handing over parcels to clients handing over parcels to clients, making data entry etc. The real making data entry etc. The real control and management of all those forms were in the hands of control and management of all those forms were in the hands of control and management of all those forms were in the hands of Shri Bhawarlal Jain/Rejendra Jain (iv) those name sake directors, Shri Bhawarlal Jain/Rejendra Jain (iv) those name sake directors, Shri Bhawarlal Jain/Rejendra Jain (iv) those name sake directors, partners etc. were not h partners etc. were not having any knowledge of the business activity aving any knowledge of the business activity carried out in the respective entities, (v) all those persons were in carried out in the respective entities, (v) all those persons were in carried out in the respective entities, (v) all those persons were in respect of salary mostly in cash (vi) those respect of salary mostly in cash (vi) those directors/partners etc directors/partners etc persons were not having any contact with the importers from whom persons were not having any contact with the importers from whom persons were not having any contact with the importers from whom the diamonds had been shown as imported nds had been shown as imported. (vii) Those name sake Those name sake directors/partners also admitted in the statement recorded u/s directors/partners also admitted in the statement recorded u/s directors/partners also admitted in the statement recorded u/s 132(4) of the Act that they were merely dummy directors/partners. 132(4) of the Act that they were merely dummy directors 132(4) of the Act that they were merely dummy directors (viii)Shri Rejendra Jain in his statement u/s 132(4) of the Act dated Shri Rejendra Jain in his statement u/s 132(4) of the Act dated Shri Rejendra Jain in his statement u/s 132(4) of the Act dated 05.10.2013 himself admitted that all those entities were mself admitted that all those entities were managed mself admitted that all those entities were and controlled by him and those persons were employees and and controlled by him and those persons were employees and and controlled by him and those persons were employees and shown as director and partners. shown as director and partners. (ix) No stock of diamond was found No stock of diamond was found at the registered office at the registered office/ business premises or residential premises business premises or residential premises of the dummy directors/ of the dummy directors/partners and proprietors including Shri partners and proprietors including Shri Rejendra Jain. (x) The employees of Shri Rajendra Jain reveal The employees of Shri Rajendra Jain reveal The employees of Shri Rajendra Jain revealed during statement recorded u/s 132(4) of the Act that those entities during statement recorded u/s 132(4) of the Act that those entities during statement recorded u/s 132(4) of the Act that those entities were used mainly for giving accommodation entries, bogus were used mainly for giving accommodation entries, bogus were used mainly for giving accommodation entries, bogus purchases and loans and advances to various beneficiaries. hases and loans and advances to various beneficiaries. hases and loans and advances to various beneficiaries.

2.2 In view of above observation In view of above observations, the Ld. Assessing Officer vide , the Ld. Assessing Officer vide order sheet entry dated 04.11.2016 asked the assessee to produce order sheet entry dated 04.11.2016 asked the assessee to produce order sheet entry dated 04.11.2016 asked the assessee to produce the relevant party M/s Rose Impex for verification along with the relevant party M/s Rose Impex for verification al the relevant party M/s Rose Impex for verification al justification of identity identity, creditworthiness and genuineness of the , creditworthiness and genuineness of the transaction. In response, the assessee filed a copy of the bank transaction. In response, the assessee filed a copy of the bank transaction. In response, the assessee filed a copy of the bank statement, income-tax acknowledgement, balance sheet, profit and tax acknowledgement, balance sheet, profit and tax acknowledgement, balance sheet, profit and loss account etc of said party etc of said party. The assessee also filed an a . The assessee also filed an affidavit retracting the statement by Shri Bhawarlal Jain. In view of above, retracting the statement by Shri Bhawarlal Jain. In view of above, retracting the statement by Shri Bhawarlal Jain. In view of above, the the the assessee assessee assessee submitted submitted submitted that that that identity, identity, identity, genuineness genuineness genuineness and and and creditworthiness of the loan given by the party was duly explained creditworthiness of the loan given by the party was duly explained creditworthiness of the loan given by the party was duly explained but the Ld. Assessing Officer rejected the contention of the assessee but the Ld. Assessing Officer rejected the contention of th but the Ld. Assessing Officer rejected the contention of th keeping in view the observation during the course of search of Shri keeping in view the observation during the course of search of Shri keeping in view the observation during the course of search of Shri Bhawarlal Jain and statement of Shri Bhawarlal Jain wherein he Bhawarlal Jain and statement of Shri Bhawarlal Jain wherein he Bhawarlal Jain and statement of Shri Bhawarlal Jain wherein he admitted that M/s Rose Impex was a concerns M/s Rose Impex was a concerns which was controlled which was controlled by him and was used for by him and was used for providing accommodation e accommodation entry of purchase/sales and loans and loans.

2.3 Regarding the documents of M/s Rose Impex submitted by the egarding the documents of M/s Rose Impex submitted by the egarding the documents of M/s Rose Impex submitted by the assessee, the Assessing Officer noted that said party was having assessee, the Assessing Officer noted that said party was having assessee, the Assessing Officer noted that said party was having returned income of nearly Rs.2.08 lakhs as against loans given of income of nearly Rs.2.08 lakhs as against loans given of income of nearly Rs.2.08 lakhs as against loans given of Rs.1.02 crores. Copy of ret Rs.1.02 crores. Copy of retraction statement by Shri Bhawarlal Jain raction statement by Shri Bhawarlal Jain filed by the assessee was also rejected by the Assessing Officer that filed by the assessee was also rejected by the Assessing Officer that filed by the assessee was also rejected by the Assessing Officer that same was filed after a considerable delay same was filed after a considerable delay without any proof of threat without any proof of threat or coercion during recording of statement or coercion during recording of statement. The Assessing Officer . The Assessing Officer further relied on the decision of the Hon’ble Bombay High Court lied on the decision of the Hon’ble Bombay High Court in lied on the decision of the Hon’ble Bombay High Court the case of Orient Trading v. CIT (supra) the case of Orient Trading v. CIT (supra); decision of Hon’ble decision of Hon’ble Kolkata High Court in the case of Precision Finance Pvt. Ltd. (supra) Kolkata High Court in the case of Precision Finance Pvt. Ltd. (supra) Kolkata High Court in the case of Precision Finance Pvt. Ltd. (supra) and decision of Hon’ble Supreme Court in the case of P. Mohan and decision of Hon’ble Supreme Court in the case of P. Mohan and decision of Hon’ble Supreme Court in the case of P. Mohan Kala v. CIT (supra). Accordingly, the Assessing Officer treated the v. CIT (supra). Accordingly, the Assessing Officer treated the v. CIT (supra). Accordingly, the Assessing Officer treated the loan of Rs.35 lakhs shown from the said party in the books of loan of Rs.35 lakhs shown from the said party in the books of loan of Rs.35 lakhs shown from the said party in the books of accounts for the assessee as unexplained cash credit in terms of accounts for the assessee as unexplained cash credit in terms of accounts for the assessee as unexplained cash credit in terms of section 68 of the Act and made addition accordingly. section 68 of the Act and made addition accordingly. section 68 of the Act and made addition accordingly. er appeal, the Ld. CIT(A) upheld the addition 3. On further appeal, the Ld. CIT(A) upheld the addition er appeal, the Ld. CIT(A) upheld the addition observing as under:

“7.3 In this case, the appellant has taken unsecured loan 7.3 In this case, the appellant has taken unsecured loan 7.3 In this case, the appellant has taken unsecured loan amounting to Rs.35,00,000/ amounting to Rs.35,00,000/- from the M/s. Rose Impex. During from the M/s. Rose Impex. During the assessment proceedings, the AO has issued summoned to the the assessment proceedings, the AO has issued summoned to the the assessment proceedings, the AO has issued summoned to the M/s. Rose Impex for substantiating the claim of genuineness of Impex for substantiating the claim of genuineness of Impex for substantiating the claim of genuineness of loan. The M/s. Rose Impex neither attended nor submitted any loan. The M/s. Rose Impex neither attended nor submitted any loan. The M/s. Rose Impex neither attended nor submitted any details. The primary onus is on the appellant to prove the identity, details. The primary onus is on the appellant to prove the identity, details. The primary onus is on the appellant to prove the identity, creditworthiness and genuineness of the transactions. Since, the creditworthiness and genuineness of the transactions. Since, the creditworthiness and genuineness of the transactions. Since, the Rose Impex did not attended in physical manner to verify the pex did not attended in physical manner to verify the pex did not attended in physical manner to verify the genuineness of loan transaction especially when the finding was genuineness of loan transaction especially when the finding was genuineness of loan transaction especially when the finding was passed after detailed investigation being conducted by the passed after detailed investigation being conducted by the passed after detailed investigation being conducted by the directorate of Investigation, Mumbai. Further, the appellant has directorate of Investigation, Mumbai. Further, the appellant has directorate of Investigation, Mumbai. Further, the appellant has relied on the relied on the fact that Shri Bhanwarlal Jain has retracted the fact that Shri Bhanwarlal Jain has retracted the statement given to the investigation wing. But, since the statement given to the investigation wing. But, since the statement given to the investigation wing. But, since the investigation has been carried out in detailed manner covering investigation has been carried out in detailed manner covering investigation has been carried out in detailed manner covering large number of premises and conclusion has been drawn on the large number of premises and conclusion has been drawn on the large number of premises and conclusion has been drawn on the basis of evidence as wel basis of evidence as well as statement recorded under oath of l as statement recorded under oath of various person including Mr. Bhanwarlal Jain. The A.O has also various person including Mr. Bhanwarlal Jain. The A.O has also various person including Mr. Bhanwarlal Jain. The A.O has also pointed that retracement has been made much later as an pointed that retracement has been made much later as an pointed that retracement has been made much later as an afterthought and with a view of avoid the legal consequences. In afterthought and with a view of avoid the legal consequences. In afterthought and with a view of avoid the legal consequences. In view of this, the retracement of t view of this, the retracement of the statement of Mr. Bhanwarlal he statement of Mr. Bhanwarlal Jain cannot be considered as significant legal consequences. Jain cannot be considered as significant legal consequences. Jain cannot be considered as significant legal consequences. Hence, the A.O concluded that submission given by the assessee Hence, the A.O concluded that submission given by the assessee Hence, the A.O concluded that submission given by the assessee doesn’t have force to satisfy the condition of the identity, doesn’t have force to satisfy the condition of the identity, doesn’t have force to satisfy the condition of the identity, creditworthiness and genuineness of the creditworthiness and genuineness of the transactions and hence it transactions and hence it needs to be added to the income of the appellant. I agree with the needs to be added to the income of the appellant. I agree with the needs to be added to the income of the appellant. I agree with the view of the A.O that considering the detailed examination being view of the A.O that considering the detailed examination being view of the A.O that considering the detailed examination being conducted by the investigation wing, evidence unearthed in the conducted by the investigation wing, evidence unearthed in the conducted by the investigation wing, evidence unearthed in the course of search and subsequent stat course of search and subsequent statement recorded reflected the ement recorded reflected the non-genuine and accommodative nature of transaction which genuine and accommodative nature of transaction which genuine and accommodative nature of transaction which cannot be established to be genuine by merely retracement of cannot be established to be genuine by merely retracement of cannot be established to be genuine by merely retracement of statement of Shri Bhanwarlal Jain. The physical appearances was statement of Shri Bhanwarlal Jain. The physical appearances was statement of Shri Bhanwarlal Jain. The physical appearances was not found and hence mere documentary trail a not found and hence mere documentary trail also don’t establish lso don’t establish the genuineness of the loan transaction. In such circumstance, it the genuineness of the loan transaction. In such circumstance, it the genuineness of the loan transaction. In such circumstance, it would be very relevant and apt to rely on the judgment of Hon’ble would be very relevant and apt to rely on the judgment of Hon’ble would be very relevant and apt to rely on the judgment of Hon’ble Supreme Court in Sumati Dayal v. CIT [(1995) 214 ITR 801 (SC)], Supreme Court in Sumati Dayal v. CIT [(1995) 214 ITR 801 (SC)], Supreme Court in Sumati Dayal v. CIT [(1995) 214 ITR 801 (SC)], support the use of surrounding circumsta support the use of surrounding circumstances and material nces and material evidence in arriving at a conclusion. It would also be relevant to evidence in arriving at a conclusion. It would also be relevant to evidence in arriving at a conclusion. It would also be relevant to rely on judgment of Calcutta High Court in case of Pr. CIT Vs Swati rely on judgment of Calcutta High Court in case of Pr. CIT Vs Swati rely on judgment of Calcutta High Court in case of Pr. CIT Vs Swati Bajaj 139 Taxmann.com 352 (Calcutta) wherein Hon’ble court in Bajaj 139 Taxmann.com 352 (Calcutta) wherein Hon’ble court in Bajaj 139 Taxmann.com 352 (Calcutta) wherein Hon’ble court in its landmark judgment has dealt about onu its landmark judgment has dealt about onus of proof especially in s of proof especially in cases wherein detailed investigation was carried out and how cases wherein detailed investigation was carried out and how cases wherein detailed investigation was carried out and how evidences and circumstantial finding holds key. evidences and circumstantial finding holds key. 7.4 Based on the above findings, it is clear that the assessee has 7.4 Based on the above findings, it is clear that the assessee has 7.4 Based on the above findings, it is clear that the assessee has not been able to discharge the burden of proving the not been able to discharge the burden of proving the not been able to discharge the burden of proving the genuineness and creditworthiness of the loan transaction and hence the and creditworthiness of the loan transaction and hence the and creditworthiness of the loan transaction and hence the addition of Rs.35,00,000/ addition of Rs.35,00,000/- made by the A.O under Section 68 is made by the A.O under Section 68 is upheld. Accordingly, ground no. 1 is dismissed. upheld. Accordingly, ground no. 1 is dismissed.”

5.1 Challenging the ground No. 1 of the appeal, the Ld. counsel for Challenging the ground No. 1 of the appeal, the Ld. counsel for Challenging the ground No. 1 of the appeal, the Ld. counsel for the assessee submitted that reasons have been recorded on the assessee submitted that reasons have been recorded the assessee submitted that reasons have been recorded borrowed satisfaction borrowed satisfaction and without application of without application of mind by the sel for the assessee submitted that Assessing Officer. The Ld. coun he Ld. counsel for the assessee submitted that even nature of the transaction has not been specified by the even nature of the transaction has not been specified by the even nature of the transaction has not been specified by the Assessing Officer in the reasons recorded. He submitted that there Assessing Officer in the reasons recorded. He submitted that there Assessing Officer in the reasons recorded. He submitted that there was no tangible material to reopen the assessment no tangible material to reopen the assessment and there was no tangible material to reopen the assessment no live link of the material the material and the reasons recorded. Further, he and the reasons recorded. Further, he submitted that basis on which reasons for the recorded statement submitted that basis on which reasons for the recorded statement submitted that basis on which reasons for the recorded statement of Shri Bhawarlal Jain which has already been retracted by him. In of Shri Bhawarlal Jain which has already been retracted by him. of Shri Bhawarlal Jain which has already been retracted by him. view of these submission, the ld Counsel contended that view of these submission, the ld Counsel contended that view of these submission, the ld Counsel contended that reassessment proceedings are reassessment proceedings are liable for setaside as void liable for setaside as void ab-intio.

5.2 On the contrary, the Ld. DR submitted that the Assessing On the contrary, the Ld. DR submitted that the Assessing On the contrary, the Ld. DR submitted that the Assessing Officer has recorded reasons on the basis of information available Officer has recorded reasons on the basis of information available Officer has recorded reasons on the basis of information available with him which was relevant to the case of the assessee and on the which was relevant to the case of the assessee and on the which was relevant to the case of the assessee and on the basis of which had which had made requisite belief that income escaped that income escaped assessment. He submitted that in view of observation noticed assessment. He submitted that in view of observation noticed assessment. He submitted that in view of observation noticed during the course of search action during the course of search action of Shri Bhawarlal Jain Shri Bhawarlal Jain/Rajendra Jain and their statement statements, reasons have been recorded after proper have been recorded after proper application of the mind by the Assessing Officer. T mind by the Assessing Officer. T mind by the Assessing Officer. The Assessing Officer has particularly referred to the name of the entity which has Officer has particularly referred to the name of the entity which has Officer has particularly referred to the name of the entity which has given loans to the assessee. Thus there is specific information given loans to the assessee. Thus there is specific information given loans to the assessee. Thus there is specific information related to the assessee. related to the assessee.

5.3 We have heard rival submissions of the parties We have heard rival submissions of the parties We have heard rival submissions of the parties and perused the relevant materials on record the relevant materials on record. The relevant reasons recorded by The relevant reasons recorded by the Assessing Officer are reproduced as under: the Assessing Officer are reproduced as under:

“Annexure Name of the assesse Name of the assesse M/s. GOODLUCK METALS 98 Khethwadi Main M/s. GOODLUCK METALS 98 Khethwadi Main Road. Mumbai 400004. PAN AAAFG1441R Status Firm Asst. Year 2009-10 Reasons for re Reasons for re-opening of the assessment u/s. 147 of the Income Tax, opening of the assessment u/s. 147 of the Income Tax, Act. The assessee has file return of loss of Rs.29,49,289/ The assessee has file return of loss of Rs.29,49,289/- on 30.09.2016 for on 30.09.2016 for the year under consideration which was been processed u/s. 143(1) of the year under consideration which was been processed u/s. 143(1) of the year under consideration which was been processed u/s. 143(1) of the I.T. Act.

Search & Search & seizure action has been carried out by the DGIT (Inv.), seizure action has been carried out by the DGIT (Inv.), 2. Mumbai in the case of Shri Bhanwarlal Jain and his Group Concerns on Mumbai in the case of Shri Bhanwarlal Jain and his Group Concerns on Mumbai in the case of Shri Bhanwarlal Jain and his Group Concerns on 03.10.2013. During the course of search/survey action, it was revealed 03.10.2013. During the course of search/survey action, it was revealed 03.10.2013. During the course of search/survey action, it was revealed that these group concerns are merely providing accommodation that these group concerns are merely providing accommodation that these group concerns are merely providing accommodation entries through various benami concerns operated and managed by Shri. through various benami concerns operated and managed by Shri. through various benami concerns operated and managed by Shri. Bhanwarlal Jain and his Son. It was found that these concerns are Bhanwarlal Jain and his Son. It was found that these concerns are Bhanwarlal Jain and his Son. It was found that these concerns are indulged in fraudulent transactions of issuing accommodation/hawala indulged in fraudulent transactions of issuing accommodation/hawala indulged in fraudulent transactions of issuing accommodation/hawala entries which purportedly shows transaction of purc entries which purportedly shows transaction of purchase and sale of hase and sale of materials and bogus unsecured loans and advances. materials and bogus unsecured loans and advances. On the basis On the basis of information received and also on perusal of the ceived and also on perusal of the 3. records of the assessee, it has been noticed that the above mentioned records of the assessee, it has been noticed that the above mentioned records of the assessee, it has been noticed that the above mentioned assessee has availed accommodation entries from the sai assessee has availed accommodation entries from the sai assessee has availed accommodation entries from the said Group Concerns during the year under consideration. Concerns during the year under consideration. Details of the hawala entities from whom the assessee has Details of the hawala entities from whom the assessee has Details of the hawala entities from whom the assessee has 4. obtained accommodation entries for the year under consideration are obtained accommodation entries for the year under consideration are obtained accommodation entries for the year under consideration are given as under: given as under:-

Sr.No. Name of the hawala entities Name of the hawala entities Amount involved Amount involved 1. ROSE IMPEX ROSE IMPEX 35,00,000/- 35,00,000/ TOTAL TOTAL 35,00,000/- 35,00,000/

On the basis of the aforesaid information available .with the On the basis of the aforesaid information available .with the On the basis of the aforesaid information available .with the 5. undersigned, I have reason to believe that income chargeable to tax, as undersigned, I have reason to believe that income chargeable to tax, as undersigned, I have reason to believe that income chargeable to tax, as indicated above, to the tune of Rs. 35,00,000/ indicated above, to the tune of Rs. 35,00,000/- or any other income or any other income chargeable to tax which comes to my notice subsequently in the course of to tax which comes to my notice subsequently in the course of to tax which comes to my notice subsequently in the course of proceedings for re proceedings for re-assessment, has escaped assessment within the assessment, has escaped assessment within the meaning of section 147 of the IT Act 1961. The assessee has, therefore, meaning of section 147 of the IT Act 1961. The assessee has, therefore, meaning of section 147 of the IT Act 1961. The assessee has, therefore, failed to disclose true and complete particulars of inco failed to disclose true and complete particulars of income for the year me for the year under consideration. Accordingly, the case is re under consideration. Accordingly, the case is re-opened u/s. 147 of the opened u/s. 147 of the Income Tax Act for A.Yr. 2009 Income Tax Act for A.Yr. 2009-10. As per the Proviso to Sec. 151(2) of the Income tax Act 1961, As per the Proviso to Sec. 151(2) of the Income tax Act 1961, As per the Proviso to Sec. 151(2) of the Income tax Act 1961, 6. permission of the Jt. Commissioner of Income tax, Range 19(1), Mumbai permission of the Jt. Commissioner of Income tax, Range 19(1), Mumbai permission of the Jt. Commissioner of Income tax, Range 19(1), Mumbai is hereby sought to re hereby sought to re-opon the case of the assessee for A.Y. 2009 opon the case of the assessee for A.Y. 2009-10 by issue of notice u/s. 148 of the Income tax Act 1961. issue of notice u/s. 148 of the Income tax Act 1961. . Put up for kind perusal and sanction please.” Put up for kind perusal and sanction please.” 5.4 As held by the Hon’ble Supreme Court in the case of As held by the Hon’ble Supreme Court in the case of As held by the Hon’ble Supreme Court in the case of ACIT v. Rajesh Jhaveri Stock Rajesh Jhaveri Stock Brokers Pvt. Ltd 291 ITR 500 291 ITR 500 for validity of the reassessment proceedings, the reasons recorded should be the reassessment proceedings, the reasons recorded should be the reassessment proceedings, the reasons recorded should be based on the relevant material on the basis of which a reasonable based on the relevant material on the basis of which a reasonable based on the relevant material on the basis of which a reasonable person could make a req person could make a requisite belief. Further Hon’ble Supreme urther Hon’ble Supreme Court in the case of Court in the case of Raymond Woolen Mills Ltd. v. ITO & Others Ltd. v. ITO & Others (1999) 236 ITR 34 (SC) (1999) 236 ITR 34 (SC) held that at the stage of recording reasons held that at the stage of recording reasons sufficiency or the correctness of the material was not to be seen. sufficiency or the correctness of the material was not to be seen sufficiency or the correctness of the material was not to be seen 5.5 In the light of above n the light of above settled principles, we find that on the principles, we find that on the basis of information/observation ormation/observations and the statement of Shri and the statement of Shri Bhawarlal recorded recorded that that M/s M/s Rose Rose Impex Impex had provided accommodation entry to the assessee mmodation entry to the assessee, the Assessing Officer , the Assessing Officer recorded reasons to believe that income escaped assessment. Thus, recorded reasons to believe that income escaped assessment. recorded reasons to believe that income escaped assessment. in our opinion, the Assessing in our opinion, the Assessing Officer has reopened the assessment Officer has reopened the assessment after proper application of the mind after proper application of the mind. The material in the form of he material in the form of observations noted during noted during the course of search and the statement the course of search and the statement of Shri Bhawarlal Jain of Shri Bhawarlal Jain are having live link with the reasons having live link with the reasons recorded. Further, as far as recorded. Further, as far as retraction is concerned same was not retraction is concerned same was not available before the Assessing Officer while recording reasons to available before the Assessing Officer while recording reasons to available before the Assessing Officer while recording reasons to believe and therefore, no believe and therefore, not a relevant material which could be taken a relevant material which could be taken into consideration by the Assessing Officer while recording reasons into consideration by the Assessing Officer while recording reasons into consideration by the Assessing Officer while recording reasons to believe.

In view of above discussion, the ground No. 1 of the appeal of 5.6 In view of above discussion, the ground No. 1 of the appeal of In view of above discussion, the ground No. 1 of the appeal of the assessee is accordingly dismissed. the assessee is accordingly dismissed.

6.1 The Ld. counsel for the assessee mainly submitted that by way he Ld. counsel for the assessee mainly submitted that by way he Ld. counsel for the assessee mainly submitted that by way of filing documents containing acknowledgement of return, balance of filing documents containing acknowledgement of return, balance of filing documents containing acknowledgement of return, balance sheet etc. assessee has discharged its onus u/s 68 of the Act sheet etc. assessee has discharged its onus u/s 68 of the Act sheet etc. assessee has discharged its onus u/s 68 of the Act justifying identity, creditworthiness and genuineness of transactio creditworthiness and genuineness of transactio creditworthiness and genuineness of transaction. 6.2 The Ld. counsel for the assessee also submitted that the loans The Ld. counsel for the assessee also submitted that the loans The Ld. counsel for the assessee also submitted that the loans obtained from M/s Rose Impex were returned back in the obtained from M/s Rose Impex were returned back in the obtained from M/s Rose Impex were returned back in the subsequent year and once, the loans have been returned back no subsequent year and once, the loans have been returned back no subsequent year and once, the loans have been returned back no addition u/s 68 of the Act is justified. The Ld. counsel referred to addition u/s 68 of the Act is justified. The Ld. counsel referred to addition u/s 68 of the Act is justified. The Ld. counsel referred to the Paper Book page 108 to 114 to support it contention that loans the Paper Book page 108 to 114 to support it contention that loans the Paper Book page 108 to 114 to support it contention that loans received were returned back to M/s Rose Impex. received were returned back to M/s Rose Impex.

6.3 On the contrary, the Ld. DR submitted that merely filing such On the contrary, the Ld. DR submitted that merely filing such On the contrary, the Ld. DR submitted that merely filing such documents was not sufficient in the light of observations and documents was not sufficient in the light of observation documents was not sufficient in the light of observation information unearthed unearthed during the course of the search at the during the course of the search at the premises of Shri Bhawarlal Jain group and therefore, the assessee premises of Shri Bhawarlal Jain group and therefore, the assessee premises of Shri Bhawarlal Jain group and therefore, the assessee was asked to produce those parties for verification of the identity, asked to produce those parties for verification of the identity, asked to produce those parties for verification of the identity, creditworthiness and genuineness of the transaction but the creditworthiness and genuineness of the transaction but the creditworthiness and genuineness of the transaction but the assessee failed in doing so. led in doing so.

6.2 We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused . The assessee shown loan of Rs.35 the relevant materials on record the relevant materials on record. The assessee shown loan of Rs.35 lakhs from M/s Rose Impex lakhs from M/s Rose Impex in its books of accounts for the year books of accounts for the year under consideration. During the course of se under consideration. During the course of search action at the arch action at the premises of Shri Bhawarlal Jain premises of Shri Bhawarlal Jain/Rajendra Jain group it was found group it was found that M/s Rose Impex was one of the entities operated and managed that M/s Rose Impex was one of the entities operated and managed that M/s Rose Impex was one of the entities operated and managed for providing accommodation entries. The various by them for providing accommodation entries for providing accommodation entries observations noted by the authorized officer during the course of observations noted by the authorized officer durin observations noted by the authorized officer durin search in the case of Shri Bhawarlal Jain have case of Shri Bhawarlal Jain have case of Shri Bhawarlal Jain have already been referred in earlier paragraph referred in earlier paragraphs including the statement of the including the statement of the directors, partners of the entities controlled by Shri Bhawarlal Jain, directors, partners of the entities controlled by Shri Bhawarlal Jain directors, partners of the entities controlled by Shri Bhawarlal Jain that they were only dummy directors not having that they were only dummy directors not having any knowledge of any knowledge of business activity mentioned in respective books of accounts and no business activity mentioned in respective books of accounts and no business activity mentioned in respective books of accounts and no stock of any goods traded were found at the business or residential stock of any goods traded were found at the business or residential stock of any goods traded were found at the business or residential premises. In the light of above observation In the light of above observations, the assessee was asked , the assessee was asked to support the contention that the to support the contention that the loan received from M/s Rose loan received from M/s Rose Impex was a genuine loan Impex was a genuine loan. The assessee filed copy of the he assessee filed copy of the confirmation, copy of the return of income, bank statement and confirmation, copy of the return of income, bank statement and confirmation, copy of the return of income, bank statement and balance sheet and profit and loss account of M/s Rose Impex. But balance sheet and profit and loss account of M/s Rose Impex. But balance sheet and profit and loss account of M/s Rose Impex. But in the light of the observation made during in the light of the observation made during the course of the search the course of the search action and statement of Shri Bhawarlal Jain, the Assessing Officer action and statement of Shri Bhawarlal Jain, the Assessing Officer action and statement of Shri Bhawarlal Jain, the Assessing Officer asked the assessee to produce M/s Rose Impex for verification of asked the assessee to produce M/s Rose Impex for asked the assessee to produce M/s Rose Impex for identity, creditworthiness and genuineness of the transaction. But identity, creditworthiness and genuineness of the transaction. But identity, creditworthiness and genuineness of the transaction. But the assessee miserably failed i the assessee miserably failed in producing so. No o request on the part of the assessee part of the assessee for issue of any summon to the said party any summon to the said party was made. In said circumstances, the Assessing Officer held the said . In said circumstances, the Assessing Officer held the said . In said circumstances, the Assessing Officer held the said loan as unexplained cash credit in terms of section 68 of the Act. cash credit in terms of section 68 of the Act. Before the Ld. CIT(A), Before the Ld. CIT(A), the assessee submitted that M/s Bhawarlal the assessee submitted that M/s Bhawarlal Jain retracted his statement and therefore, same cannot be relied Jain retracted his statement and therefore, same cannot be relied Jain retracted his statement and therefore, same cannot be relied on making addition in the hands of the assessee. on making addition in the hands of the assessee.

6.3 We are of the opinion that it is the assessee who has produced We are of the opinion that it is the assessee who has produced We are of the opinion that it is the assessee who has produced the copy of the affidavit affidavit of retraction of Shri Bhawarlal Jain through traction of Shri Bhawarlal Jain through whom the assessee is alleged to have is alleged to have received loan and therefore, received loan and therefore, for verification of identity of M/s Rose Impex, the for verification of identity of M/s Rose Impex, the onus was on the onus was on the assessee to produce assessee to produce concerned proprietor of M/s Rose Impex of M/s Rose Impex alongwith shri Bhanwarlal alongwith shri Bhanwarlal jain for verification of retraction of his jain for verification of retraction of his statement. Merely filing a copy of retraction Merely filing a copy of retraction affidavit affidavit after a long period after the date of recording date of recording statement that too statement that too without any evidence of duress or of duress or coercion, is not sufficient enough to enough to dilute authenticity of statement of statement recorded u/s 132(4) of the Act. In such recorded u/s 132(4) of the Act. In such circumstances, the claim of the assessee circumstances, the claim of the assessee based on based on retraction of statement by Shri Bhawarlal Jain is accordingly rejected. Bhawarlal Jain is accordingly rejected. Bhawarlal Jain is accordingly rejected.

6.4 Further, the Ld. counsel for the assessee befo Further, the Ld. counsel for the assessee befo Further, the Ld. counsel for the assessee before submitted that loan received from M/s Rose Impex that loan received from M/s Rose Impex was retuned back and retuned back and therefore, no additions made in the hands of the assessee. The ld therefore, no additions made in the hands of the assessee. therefore, no additions made in the hands of the assessee. Counsel referred to the documents supporting return of loan. to the documents supporting return of loan. to the documents supporting return of loan. Those documents though referred before the lower authorities in Those documents though referred before the lower authorities in Those documents though referred before the lower authorities in written submission however same were not filed and therefore written submission however same were not filed and therefore written submission however same were not filed and therefore constitute in the nature of additional evidence.. constitute in the nature of additional evidence..

6.5 Taking accommodation entry of Taking accommodation entry of loan (by way of cheque against loan (by way of cheque against giving cash payment) is one part of transaction and returning of giving cash payment) is one part of transaction and returning of giving cash payment) is one part of transaction and returning of said loan entry( by way of cheque and receive cash) is the other said loan entry( by way of cheque and receive cash) is the other said loan entry( by way of cheque and receive cash) is the other part of transaction of accommodation entry. Therefore, in our part of transaction of accommodation entry. Therefore, i part of transaction of accommodation entry. Therefore, i nature of source opinion, what is important is th opinion, what is important is the Explanation for nature of source of the credit received during the year under consideration and not of the credit received during the year under consideration and of the credit received during the year under consideration and returning of the credit credit in the subsequent year, which in any way year, which in any way do not discharge the liability of the assessee of explaining identity, not discharge the liability of the assessee of explaining identity, not discharge the liability of the assessee of explaining identity, creditworthiness and genuineness of the transaction particularly nd genuineness of the transaction particularly nd genuineness of the transaction particularly when the director, partners of those entities including M/s Rose when the director, partners of those entities including M/s Rose when the director, partners of those entities including M/s Rose Impex admitted they were engaged in providing accommodation Impex admitted they were engaged in providing accommodation Impex admitted they were engaged in providing accommodation entries. When the assessee has taken loan the assessee has taken loan from M/s Rose Impex M/s Rose Impex and which is appearin appearing in the books of accounts of assessee, the of assessee, the onus is on the assessee to produce such party assessee to produce such party for for verification of identity, creditworthiness and genuineness of the transaction. identity, creditworthiness and genuineness of the transaction. identity, creditworthiness and genuineness of the transaction.

6.6 Further, Further, Further, the the the Assessing Assessing Assessing Officer Officer Officer has has has also also also taken taken taken into into into consideration, the financia consideration, the financial statement of creditor for rejecting the l statement of creditor for rejecting the creditworthiness and also various observation made during the creditworthiness and also various observation made during the creditworthiness and also various observation made during the course of the search at the premises of Shri Bhawarlal Jain which course of the search at the premises of Shri Bhawarlal Jain which course of the search at the premises of Shri Bhawarlal Jain which shows that the creditor was only a dummy entity without any stock shows that the creditor was only a dummy entity without any stock shows that the creditor was only a dummy entity without any stock of the goods and onl of the goods and only paper entity. Further, the Assessing Officer y paper entity. Further, the Assessing Officer also pointed out that the return of income shown by the assessee also pointed out that the return of income shown by the assessee also pointed out that the return of income shown by the assessee was not commensurate with the loan of more than Rs.10 crores was not commensurate with the loan of more than Rs.10 crores was not commensurate with the loan of more than Rs.10 crores appearing in the books of accounts of the said entity. The Ld. DR appearing in the books of accounts of the said entity. The Ld. DR appearing in the books of accounts of the said entity. The Ld. DR referred to Paper Book page 17 which is balance sheet of M/s Rose Book page 17 which is balance sheet of M/s Rose Book page 17 which is balance sheet of M/s Rose Impex on perusal of which we find that on the said loans and Impex on perusal of which we find that on the said loans and Impex on perusal of which we find that on the said loans and advances of Rs.100,237,864/ advances of Rs.100,237,864/- is appearing whereas on the liability is appearing whereas on the liability sundry creditor of Rs.249,326,675/ sundry creditor of Rs.249,326,675/- are appearing. Thus there was are appearing. Thus there was no actual creditworthiness with the assessee for extending loans to ditworthiness with the assessee for extending loans to ditworthiness with the assessee for extending loans to the assessee.

6.7 On verification of the Paper Book page 14 On verification of the Paper Book page 14, which is a copy of which is a copy of the confirmation by M/s Rose Impex, we find that same is not the confirmation by M/s Rose Impex, we find that same is not the confirmation by M/s Rose Impex, we find that same is not signed by the proprietor and it has been signed by Mr. R.K. Jain signed by the proprietor and it has been signed by Mr. R.K. Jain signed by the proprietor and it has been signed by Mr. R.K. Jain claiming to be his authorized signatory, which confirms the his authorized signatory, which confirms the his authorized signatory, which confirms the observation made during the course of the search that this entity observation made during the course of the search t observation made during the course of the search t was managed and operated by the Bhawarlal Jain and Rajendra was managed and operated by the Bhawarlal Jain and Rajendra was managed and operated by the Bhawarlal Jain and Rajendra Jain.

6.8 Further, in the profit and loss account Further, in the profit and loss account (PB-16)/ balance sheet 16)/ balance sheet (PB-17) and other documents the name of the proprietor of M/s and other documents the name of the proprietor of M/s and other documents the name of the proprietor of M/s aj Jain whereas in Rose Impex is appearing as Rose Impex is appearing as Sh. Gautam Pokharaj Jain whereas in acknowledgement of return of income (PB acknowledgement of return of income (PB-15) he has been referred he has been referred as Sh. Gautam Pokhraj Mehta. A Sh. Gautam Pokhraj Mehta. All these facts doubt credential of ll these facts doubt credential of documents filed by the assessee documents filed by the assessee 6.9 The retraction statement of Shri Bhawarlal Jain available on The retraction statement of Shri Bhawarlal Jain available on The retraction statement of Shri Bhawarlal Jain available on Paper Book page 35 onward refer to entities other than M/s Rose ok page 35 onward refer to entities other than M/s Rose ok page 35 onward refer to entities other than M/s Rose Impex and therefore, said statement is also not relevant to the facts Impex and therefore, said statement is also not relevant to the facts Impex and therefore, said statement is also not relevant to the facts of the assessee.

6.10 Before us, the Ld. counsel for the assessee relied in the Before us, the Ld. counsel for the assessee relied in the Before us, the Ld. counsel for the assessee relied in the decision of the Hon’ble Supreme Court in the case of Ld. CIT v. decision of the Hon’ble Supreme Court in the cas decision of the Hon’ble Supreme Court in the cas Orissa Corpn. (P.) Ltd. [1986] 25 Taxman 80F (SC). The relevant Orissa Corpn. (P.) Ltd. [1986] 25 Taxman 80F (SC). The relevant Orissa Corpn. (P.) Ltd. [1986] 25 Taxman 80F (SC). The relevant finding of the Hon’ble Supreme Court is reproduced as under: finding of the Hon’ble Supreme Court is reproduced as under: finding of the Hon’ble Supreme Court is reproduced as under:

“13. In this case the assessee had given the names and 13. In this case the assessee had given the names and 13. In this case the assessee had given the names and addresses of the alleged creditors. It was in the knowledge addresses of the alleged creditors. It was in the knowledge addresses of the alleged creditors. It was in the knowledge of the revenue that the said creditors were the income revenue that the said creditors were the income-tax assessees tax assessees Their index number was in the file of the revenue. The revenue, Their index number was in the file of the revenue. The revenue, Their index number was in the file of the revenue. The revenue, apart from issuing notices under section 131 at the instance of apart from issuing notices under section 131 at the instance of apart from issuing notices under section 131 at the instance of the assessee, did not pursue the matter further. The revenu the assessee, did not pursue the matter further. The revenu the assessee, did not pursue the matter further. The revenue did not examine the source of income of the said alleged creditors to not examine the source of income of the said alleged creditors to not examine the source of income of the said alleged creditors to find out whether they were credit find out whether they were credit-worthy or were such who could worthy or were such who could advance the alleged loans. There was no effort made to pursue advance the alleged loans. There was no effort made to pursue advance the alleged loans. There was no effort made to pursue the so-called alleged creditors. In those circumstances, t called alleged creditors. In those circumstances, the called alleged creditors. In those circumstances, t assessee could not do any further. In the premises, if the assessee could not do any further. In the premises, if the assessee could not do any further. In the premises, if the Tribunal came to the conclusion that the assessee has Tribunal came to the conclusion that the assessee has Tribunal came to the conclusion that the assessee has discharged the burden that lay on him then it could not be said discharged the burden that lay on him then it could not be said discharged the burden that lay on him then it could not be said that such a conclusion was unreasonable or perverse or based on that such a conclusion was unreasonable or perverse or based on that such a conclusion was unreasonable or perverse or based on no evidence. If the conclusion is based on some evidence on If the conclusion is based on some evidence on which a conclusion could be arrived at, no question of which a conclusion could be arrived at, no question of which a conclusion could be arrived at, no question of law as such such arises.” 6.11 In above case, no efforts were made by no efforts were made by the Revenue other than the Revenue other than issuing notice u/s 131 of the Act to analyze the financial of the issuing notice u/s 131 of the Act to analyze the financial of the issuing notice u/s 131 of the Act to analyze the financial of the creditor but in the instant case, the Assessing Officer has duly creditor but in the instant case, the Assessing Officer has duly creditor but in the instant case, the Assessing Officer has duly analyzed the financial and observed the financial and observed that return of income filed by return of income filed by the said creditor was was not sufficient to explain the loans of more not sufficient to explain the loans of more than Rs.100 crores extended extended by said entity. Thus, the ratio of the above case does not apply over the facts of the instant case. does not apply over the facts of the instant case. does not apply over the facts of the instant case.

6.12 The Ld. counsel for the assessee also relied on the decision of The Ld. counsel for the assessee also relied on the decision of The Ld. counsel for the assessee also relied on the decision of the Hon’ble High Court of Allahabad in the case of Nathu Ram High Court of Allahabad in the case of Nathu Ram High Court of Allahabad in the case of Nathu Ram Premchand v. CIT 49 ITR 561 (Allahabad) where Premchand v. CIT 49 ITR 561 (Allahabad) wherein it is held that the in it is held that the Assessing Officer to exercise the authority under the Civil Procedure Assessing Officer to exercise the authority under the Civil Procedure Assessing Officer to exercise the authority under the Civil Procedure Code for enforce appearance of witness but in the instant case no Code for enforce appearance of witness but in the instant case no Code for enforce appearance of witness but in the instant case no current address of the said party was t address of the said party was provided nor any request was provided nor any request was made for issuing any summon. made for issuing any summon.

6.13 Before us, the Ld. counsel for the assessee also relied on the Before us, the Ld. counsel for the assessee also relied on the Before us, the Ld. counsel for the assessee also relied on the decision of the Tribunal in the case of M/s Reliance Corporation in decision of the Tribunal in the case of M/s Reliance Corporation in decision of the Tribunal in the case of M/s Reliance Corporation in to 1071/Mum/2017 dated 12.04.2017 wherein M/s to 1071/Mum/2017 dated 12.04.2017 wherein M/s ITA No. 1069 to 1071/Mum/2017 dated 12.04.2017 wherein M/s Rose Impex and Megha Gems have been accepted as genuine. The Rose Impex and Megha Gems have been accepted as genuine. The Rose Impex and Megha Gems have been accepted as genuine. The relevant finding of the Tribunal is reproduced as under: relevant finding of the Tribunal is reproduced as under: relevant finding of the Tribunal is reproduced as under:

“8. We have heard the rival contentions perused the material placed 8. We have heard the rival contentions perused the material placed 8. We have heard the rival contentions perused the material placed before us including the orders of authorities below and orders relied before us including the orders of authorities below and orders relied before us including the orders of authorities below and orders relied upon by the parties. We find that undisputedly the assessee has upon by the parties. We find that undisputedly the assessee h upon by the parties. We find that undisputedly the assessee h borrowed money by way of loan from three aforesaid three parties borrowed money by way of loan from three aforesaid three parties borrowed money by way of loan from three aforesaid three parties i.e M/s Laxmi Trading Company, M/s Rose Impex and Megha Gems i.e M/s Laxmi Trading Company, M/s Rose Impex and Megha Gems i.e M/s Laxmi Trading Company, M/s Rose Impex and Megha Gems from whom the assessee borrowed the money and total outstanding from whom the assessee borrowed the money and total outstanding from whom the assessee borrowed the money and total outstanding including the interest as on 31.3.2010 were amounting to including the interest as on 31.3.2010 were amounting to including the interest as on 31.3.2010 were amounting to Rs.1,29,04,231/-. The case of the assessee was re . The case of the assessee was re-opened upon opened upon receiving the and other three appeals information from DGIT(Inv), receiving the and other three appeals information from DGIT(Inv), receiving the and other three appeals information from DGIT(Inv), Mumbai that the assessee was one of the beneficiary of the said Mumbai that the assessee was one of the beneficiary of the said Mumbai that the assessee was one of the beneficiary of the said accommodation entries provided by Mr.Bhanwarlal Jain and group. accommodation entries provided by Mr.Bhanwarlal Jain and group. accommodation entries provided by Mr.Bhanwarlal Jain and group. We find from the record that the assessee filed during the course of d from the record that the assessee filed during the course of d from the record that the assessee filed during the course of assessment proceedings all the details like loan confirmation letters assessment proceedings all the details like loan confirmation letters assessment proceedings all the details like loan confirmation letters from the creditors, PAN of the creditors, bank statements og the from the creditors, PAN of the creditors, bank statements og the from the creditors, PAN of the creditors, bank statements og the creditors and the assessee, form no.16 qua TDS on interest ,profit creditors and the assessee, form no.16 qua TDS on interest creditors and the assessee, form no.16 qua TDS on interest and loss account and balance sheet including the ledger account of and loss account and balance sheet including the ledger account of and loss account and balance sheet including the ledger account of the creditors, and ITR etc. Moreover, the loan creditors also Moreover, the loan creditors also the creditors, and ITR etc. appeared before the AO in compliance to the notice issued appeared before the AO in compliance to the notice issued appeared before the AO in compliance to the notice issued under section 133(6) ction 133(6) of the Act and filed confirmations before of the Act and filed confirmations before the AO that loans were actually given to the assessee. From all the AO that loans were actually given to the assessee the AO that loans were actually given to the assessee these details and facts on record, we find that the assessee has these details and facts on record, we find that the assessee has these details and facts on record, we find that the assessee has discharged its onus cast upon it by filing all the necessary details as discharged its onus cast upon it by filing all the necessary details as discharged its onus cast upon it by filing all the necessary details as called for by the AO to corroborate the transactions of borrowing the called for by the AO to corroborate the transactions of borrowing the called for by the AO to corroborate the transactions of borrowing the money and thereby satisfied all the th money and thereby satisfied all the three main ingredients i.e. ree main ingredients i.e. creditworthiness of the creditors, genuineness of the transactions creditworthiness of the creditors, genuineness of the transactions creditworthiness of the creditors, genuineness of the transactions and identity of the creditors by filing all the details as discussed and identity of the creditors by filing all the details as discussed and identity of the creditors by filing all the details as discussed above which proved that the identity of the creditors, genuineness of above which proved that the identity of the creditors, genuineness of above which proved that the identity of the creditors, genuineness of the transactions and cre the transactions and creditworthiness of the creditors have been ditworthiness of the creditors have been established by the assessee. So much so that the loan creditors in established by the assessee. So much so that the loan creditors in established by the assessee. So much so that the loan creditors in response to the notice issued under response to the notice issued under section 133(6) appeared before appeared before the AO and confirmed the that the AO and confirmed the that they have given interest bearing they have given interest bearing loans to the assessee on which TDS have been deducted and paid loans to the assessee on which TDS have been deducted and paid loans to the assessee on which TDS have been deducted and paid and form no.16A issued to the loan creditors also filed before the and form no.16A issued to the loan creditors also filed before the and form no.16A issued to the loan creditors also filed before the AO. Once the assessee has filed all and other three appeals the AO. Once the assessee has filed all and other three appeals the AO. Once the assessee has filed all and other three appeals the necessary documents before t necessary documents before the AO then the onus is shifted to the he AO then the onus is shifted to the department to disprove the stand of the assessee, which department department to disprove the stand of the assessee, which department department to disprove the stand of the assessee, which department has failed to do so in the present case. The AO has merely has failed to do so in the present case. The AO has merely has failed to do so in the present case. The AO has merely proceeded and relied on the information received from the DGIT(Inv), proceeded and relied on the information received from the DGIT(Inv), proceeded and relied on the information received from the DGIT(Inv), Mumbai that the assesse Mumbai that the assessee is one of the beneficiary of the e is one of the beneficiary of the accommodation entries without bringing any material against the accommodation entries without bringing any material against the accommodation entries without bringing any material against the assessee on record by contrary to the defense put up by the assessee on record by contrary to the defense put up by the assessee on record by contrary to the defense put up by the assessee during the course of appellant proceedings. No cross assessee during the course of appellant proceedings. No cross assessee during the course of appellant proceedings. No cross examination was allowed to the asse examination was allowed to the assessee and information was used ssee and information was used against the assessee causing violation of natural justice. The FAA against the assessee causing violation of natural justice. The FAA against the assessee causing violation of natural justice. The FAA dismissed the appeal of the assessee ex dismissed the appeal of the assessee ex- parte for non attendance of parte for non attendance of the ld.AR. …………………………………………………. …………………………………………………. In our considered view the facts of the assessee case are squarely In our considered view the facts of the assessee case are squarely In our considered view the facts of the assessee case are squarely covered by the ratio ratio laid down in the decisions referred to above referred to above. We ,therefore , in view of our observations and the ratio laid down by ,therefore , in view of our observations and the ratio laid down by ,therefore , in view of our observations and the ratio laid down by the various decisions are inclined to set aside the order of CIT(A) and the various decisions are inclined to set aside the order of CIT(A) and the various decisions are inclined to set aside the order of CIT(A) and direct he AO to delete the additions of Rs. 1,29,04,231/-. Since we direct he AO to delete the additions of Rs. 1,29,04,231/ direct he AO to delete the additions of Rs. 1,29,04,231/ have decided the issue of addition d the issue of addition u/s 68 in favour of the assessee, in favour of the assessee, the addition as sustained by the ld CIT(A) u/s 69C of the Act of Rs. the addition as sustained by the ld CIT(A) u/s 69C of the Act of Rs. the addition as sustained by the ld CIT(A) u/s 69C of the Act of Rs. 3,45,000/- is also ordered to be deleted. In result the appeal of the is also ordered to be deleted. In result the appeal of the is also ordered to be deleted. In result the appeal of the assessee is allowed is allowed.” 6.14 However, we find that in However, we find that in above case, the loan creditors se, the loan creditors before the Assessing Officer in compliance to notices u/s appeared before the Assessing Officer in compliance to notices u/s before the Assessing Officer in compliance to notices u/s 133(6) of the Act, whereas in the instant case no such compliance whereas in the instant case no such compliance whereas in the instant case no such compliance has been made and therefore, the ratio in the said cannot be has been made and therefore, the ratio in the said cannot be has been made and therefore, the ratio in the said cannot be imported to the facts of the instant case. Accordingly, the imported to the facts of the instant case. Accordingly, the imported to the facts of the instant case. Accordingly, the contention of the assessee is rejected. contention of the assessee is rejected.

6.15 In view of aforesaid discussion, we do no In view of aforesaid discussion, we do not find any error in the t find any error in the order of the Ld. CIT(A) on the issue in dispute and accordingly order of the Ld. CIT(A) on the issue in dispute and accordingly order of the Ld. CIT(A) on the issue in dispute and accordingly uphold the same.

6.16 The ground No. 3 and 4 of the appeal of the assessee are The ground No. 3 and 4 of the appeal of the assessee are The ground No. 3 and 4 of the appeal of the assessee are accordingly dismissed. accordingly dismissed.

7 As far as ground No As far as ground Nos. 2 and 6 of the appeal of the assessee the . 2 and 6 of the appeal of the assessee the Ld. DR objected that same were not adjudicated by the Ld. CIT(A) Ld. DR objected that same were not adjudicated by the Ld. CIT(A) Ld. DR objected that same were not adjudicated by the Ld. CIT(A) and therefore, same were in the nature of the and therefore, same were in the nature of the addition ground. The addition ground. The Ld. counsel for the assessee Ld. counsel for the assessee also did not advanced advanced any arguments in support of those grounds and therefore, those ground are in support of those grounds and therefore, those ground are in support of those grounds and therefore, those ground are dismissed as infructuous. dismissed as infructuous.