DCIT CC - 2(3), MUMBAI, MUMBAI vs. SHREE SALASAR MARBLES IMPEX PRIVATE LIMITED, MUMBAI

Grounds taken by the Revenue are reproduced as under: “i. On the facts and circumstances of the case, the Ld CIT(A) erred in deleting the addition of Rs. 78,64,865/- u/s. 68 of the Act without appreciating the fact that assessee could not provide any tangible material to prove the identity and credit worthiness of the loan creditor and the genuineness of loan transaction."

It is stated before us that issues involved in both the appeals are common relating to deletion of addition in respect of unsecured loans received during the year under consideration and for import purchases presumed to be paid other than mentioned in books of accounts. Accordingly, we take up both the appeals together by passing this consolidated order. For drawing facts of the case, we refer to the appeal for Assessment Year 2012-13. Our observations and findings shall accordingly apply mutatis mutandis to the appeal for Assessment Year 2013-14. 4. Brief facts of the case are that assessee is engaged in the business of imports and trading in marbles and filed its return of income on Shree Salasar Marbles Impex Pvt. Ltd. AYs 2013-14 and 2012-13

09.2012, reporting a total income of Rs.10,26,530/-. The case was selected for scrutiny and order u/s.143(3) was passed on 20.03.2015 and the total income of Rs.86,18,605 was assessed. Thereafter, assessee filed an appeal before ld. CIT(A), wherein the addition of Rs.60,31,099/- was deleted and the total income computed after giving effect of ld. CIT(A) order was of Rs.25,87,506/-.

1. Subsequently, ld. Assessing Officer after receiving an information from the DCIT, CC- 3(1), Kolkata that the search u/s.132 of the Act was carried in the case of Shri Praveen Agarwal and his group companies, wherein he admitted of providing the accommodation entries to various parties/beneficiaries and the assessee had received the accommodation entries from such two entities of Rs.60,00,000/-, framed a reason to believe that the assessee had taken accommodation entries in the form of bogus loans from the entities managed by Shri. Praveen Agarwal, therefore the assessee's income to the tune of Rs.60,00,000/- had escaped assessment as provided in section 147 of the Act.

2. Further, ld. Assessing Officer received another information from DDIT(Inv.), Unit-4(1), Mumbai that a search was carried by DRI authorities at assessee's premise which revealed that assessee had undervalued the import of marbles from foreign exporters named M/s Henrauxx Spa and M/s Venill's SRL on four transactions of Rs.56,37,709/- and therefore, the assessee's income to the tune of said amount had escaped assessment as provided in section 147 of the Act. Accordingly, ld. Assessing Officer issued notice u/s 148 of the Act on 28.03.2019 and reopened the completed assessment. Shree Salasar Marbles Impex Pvt. Ltd. AYs 2013-14 and 2012-13

Ld. Assessing Officer passed an order u/s 143(3) r.w.s. 147 of the Act on 21.12.2019 by making the addition u/s.68 of the Act on account of unsecured loans received of Rs.60,00,000/- and u/s 69C of the Act for under valuation of import purchase of marble blocks of Rs.56,37,709/-, determining total income of Rs.1,42,25,220/-. Aggrieved, assessee went in appeal before ld. CIT(A).

Ld. CIT(A) considering the fact that the assessee furnished adequate documents/evidences to establish the identity, credit worthiness of lenders and genuineness of loan transactions and in absence of contrary material against the assessee, deleted the addition u/s. 68 of unsecured loans.

1. For deleting the addition of undervaluation of import of marbles, ld. CIT(A) while allowing the ground raised by the assessee observed and held that ld. AO made the addition relying on the note-verbale information received from Custom authorities, however, the Appellate Authority under the Customs Act had set aside the allegations and decided the issue in favour of the assessee. Further, he observed that assessee had furnished documentary evidences to justify the import of marble for which no defects were pointed out by the ld. AO. He further took note of the decision of Coordinate Bench of ITAT Mumbai in case of Trident Marbles Pvt. Ltd. vs. DCIT in ITA No.185/Mum/2023, dated 28.06.2023, wherein on identical fact pattern the addition made by ld. AO was deleted. He also referred to the decision of Coordinate Bench in the case of Mohan Takkar in ITA No. 1434 to 1437 Mum/2018, dated 24.05.2021, wherein similar addition of undervaluation of import purchase was deleted. Accordingly, ld. CIT(A) concluded to delete the addition of undervaluation of import of marble. Shree Salasar Marbles Impex Pvt. Ltd. AYs 2013-14 and 2012-13

2. Aggrieved, Revenue is in appeal before the Tribunal.

We have carefully considered the facts of the case and the submissions made by the assessee. Before us, ld. Counsel for the assessee reiterated the factual position and corroborated the same by referring to the documentary evidences which forms part of the paper book. Assessee had received the loans from M/s. Khushbu Complex Pvt. Ltd. of Rs.40,00,000/- on 29.03.2012 and such loan had been repaid in subsequent year on 28.06.2013. Similarly, the loan received by the assessee from M/s. Kingfisher Properties Ltd. of Rs.20,00,000/- on 27.01.2012 had been repaid in subsequent year on 13.07.2013. It is observed that assessee had received the loans for a short period of time and said loans were repaid in subsequent year along with interest thereon. Assessee has furnished documents to justify the identity and credit-worthiness of lenders and genuineness of loans received during the year. Assessee filed copies of PAN, Assessing Officer details, CIN Master data obtained from