SHRI SANJAY SHANTILAL JAIN,MUMBAI vs. JCIT, CENTRAL RANGE-8, MUMBAI

PER OM PRAKASH KANT, AM PER OM PRAKASH KANT, AM These appeals by the assessee These appeals by the assessee except except ITA No. 6140/Mum/2010, are directed against separate orders passed by the ld. Commissioner are directed against separate orders passed by the ld. Commissioner are directed against separate orders passed by the ld. Commissioner of Income Tax – (Appeals) (Appeals) -50, Mumbai [in short, the ld. CIT(A)] for 50, Mumbai [in short, the ld. CIT(A)] for A.Y. 2011-12 to 2014 12 to 2014-15 , which are arising from assessment order , which are arising from assessment order passed in search assessments. The passed in search assessments. The ITA No. 6140/Mum/2010 is ITA No. 6140/Mum/2010 is appeal by the assessee against the order dated appeal by the assessee against the order dated 23/08/2018 passed 23/08/2018 passed by the Ld CIT(A) in relation to penalty in relation to penalty levied u/s. 271D of the Income u/s. 271D of the Income Tax Act, 1961 [for short, the Act] for A.Y. 2011 Tax Act, 1961 [for short, the Act] for A.Y. 2011-12. 12. All these appeals being connected with on being connected with one assessee and having identical facts and e assessee and having identical facts and circumstances, therefore, same circumstances, therefore, same were together and disposed of by way together and disposed of by way of this consolidated order for convenience and avoid repetition of of this consolidated order for convenience and avoid repetition of of this consolidated order for convenience and avoid repetition of facts.

SHRI SANJAY SHANTILAL JAIN ITA No.6140,6125,6126,6127,6127,6128/MUM/2018

4. The grounds of appeal raised above are without prejudice to one another 4. The grounds of appeal raised above are without prejudice to one another 5. Your appellant craves leave to add amend delete or modify

5. Your appellant craves leave to add amend delete or modify all or any of 5. Your appellant craves leave to add amend delete or modify the grounds of appeal the grounds of appeal

4. Briefly stated, the facts of the case are that the assessee Briefly stated, the facts of the case are that the assessee Briefly stated, the facts of the case are that the assessee, an individual, was earning income from salary as per the return earning income from salary as per the returns of earning income from salary as per the return income filed. For the year under consideration, the assessee filed income filed. For the year under consideration, the assessee filed income filed. For the year under consideration, the assessee filed return of income on return of income on 3/08/2011 declaring total income of Rs. declaring total income of Rs. 3,85,290/- under regular provisions of the Act. Subsequently, a under regular provisions of the Act. Subsequently, a under regular provisions of the Act. Subsequently, a search and seizure action u/s. 132 search and seizure action u/s. 132(1) of the Act was carried of the Act was carried out at the premises of the assessee on 11/06/2013 along with the search the premises of the assessee on 11/06/2013 along with the search the premises of the assessee on 11/06/2013 along with the search action at the premises of action at the premises of ‘RSBL’ Group and certain incriminating and certain incriminating

SHRI SANJAY SHANTILAL JAIN ITA No.6140,6125,6126,6127,6127,6128/MUM/2018 documents were found and seized. Consequently, notice u/s. 153A of documents were found and seized. Consequently, notice u/s. 153A of documents were found and seized. Consequently, notice u/s. 153A of the Act was issued on the Act was issued on 7/10/2014 asking the assessee to file return of asking the assessee to file return of income. In response, the assessee filed the return of income on income. In response, the assessee filed the return of income on income. In response, the assessee filed the return of income on 21.08.2015 declaring ring ring total total total income income income of of of Rs. Rs. Rs. 3,80,290/-. 3,80,290/ 3,80,290/ After considering the submission of the assessee, the Assessing Officer considering the submission of the assessee, the Assessing Officer considering the submission of the assessee, the Assessing Officer assessed the total income assessed the total income u/s. 143(3) r.w.s. 153A on 31.03.2016 u/s. 143(3) r.w.s. 153A on 31.03.2016 at Rs. 21,96,72,611/- after making certain additions/disallowances. after making certain additions/disallowances. after making certain additions/disallowances.

SHRI SANJAY SHANTILAL JAIN ITA No.6140,6125,6126,6127,6127,6128/MUM/2018

SHRI SANJAY SHANTILAL JAIN ITA No.6140,6125,6126,6127,6127,6128/MUM/2018 in the case of the assessee for n the case of the assessee for assessment year 2010 assessment year 2010-11 in has been restored to the file of the Assessing 6123/Mum/2018 has been restored to the file of the Assessing 6123/Mum/2018 has been restored to the file of the Assessing Officer for deciding after considering entries of cash flow statement Officer for deciding after considering entries of cash flow statement Officer for deciding after considering entries of cash flow statement and wherever the source of unexplained investment is explained by and wherever the source of unexplained investment is explained by and wherever the source of unexplained investment is explained by way of the undisclosed i way of the undisclosed income, then no separate addition for ncome, then no separate addition for unexplained investment should be made. unexplained investment should be made. The ground ground No.1(b) of the appeal is accordingly accordingly allowed for statistical statistical purposes.

SHRI SANJAY SHANTILAL JAIN ITA No.6140,6125,6126,6127,6127,6128/MUM/2018 decision therein shall mutatis mutandis apply here also. Accordingly, sion therein shall mutatis mutandis apply here also. Accordingly, sion therein shall mutatis mutandis apply here also. Accordingly, this ground of appeal no. 2(a) is accordingly allowed for statistical this ground of appeal no. 2(a) is accordingly allowed for statistical this ground of appeal no. 2(a) is accordingly allowed for statistical purposes.

12. The ground no. 2(b) relates to the application of the provision of The ground no. 2(b) relates to the application of the provision of The ground no. 2(b) relates to the application of the provision of section 40A(3) of the Act section 40A(3) of the Act in respect of purchases made in cash for purchases made in cash for making the cash sales. In this regard, the ld. Counsel of the assessee making the cash sales. In this regard, the ld. Counsel of the assessee making the cash sales. In this regard, the ld. Counsel of the assessee submitted that once the profit element @0.5% of the sales is accepted submitted that once the profit element @0.5% of the sales is accepted submitted that once the profit element @0.5% of the sales is accepted by the Assessing Officer, then in no case, he may invoke any by the Assessing Officer, then in no case, he may invoke any by the Assessing Officer, then in no case, he may invoke any provisions to disallow the provisions to disallow the business expenditure as it is only the net business expenditure as it is only the net income which can be taxed. Moreover, ld. Counsel of the assessee income which can be taxed. Moreover, ld. Counsel of the assessee income which can be taxed. Moreover, ld. Counsel of the assessee submitted that the provisions of section 40A(3) places burden on the submitted that the provisions of section 40A(3) places burden on the submitted that the provisions of section 40A(3) places burden on the revenue to prove with the cogent evidences that payments exceeding revenue to prove with the cogent evidences that payments exceeding revenue to prove with the cogent evidences that payments exceeding Rs. 20,000/- are made by the assessee are made by the assessee. In this context, ld. Counsel of In this context, ld. Counsel of the assessee relied on the decision of the jurisdictional High Court in the assessee relied on the decision of the jurisdictional High Court in the assessee relied on the decision of the jurisdictional High Court in the case of PCIT v. Lodha Developers (W.P. no. 2562 of 2015) PCIT v. Lodha Developers (W.P. no. 2562 of 2015) PCIT v. Lodha Developers (W.P. no. 2562 of 2015) and also relied on the decision of Hon’ble Pune ITAT in the case of DCIT v. Shri relied on the decision of Hon’ble Pune ITAT in the case of DCIT v. Shri relied on the decision of Hon’ble Pune ITAT in the case of DCIT v. Shri Narendra Mithailal Agarwal (ITA no. 808 & 811/PN/2010) submitting Narendra Mithailal Agarwal (ITA no. 808 & 811/PN/2010) Narendra Mithailal Agarwal (ITA no. 808 & 811/PN/2010)

SHRI SANJAY SHANTILAL JAIN ITA No.6140,6125,6126,6127,6127,6128/MUM/2018 that the decision of the Hon’ble Gujarat High Court in the case of that the decision of the Hon’ble Gujarat High Court in the case of that the decision of the Hon’ble Gujarat High Court in the case of Hynoup Food and Oil Industries Ltd. (290 ITR 272 (G Food and Oil Industries Ltd. (290 ITR 272 (G Food and Oil Industries Ltd. (290 ITR 272 (Guj.) relied upon by AO is already considered and distinguished by the Hon’ble Pune by AO is already considered and distinguished by the Hon’ble Pune by AO is already considered and distinguished by the Hon’ble Pune ITAT which is squarely applicable ITAT which is squarely applicable to the present facts of the case. to the present facts of the case.

SHRI SANJAY SHANTILAL JAIN ITA No.6140,6125,6126,6127,6127,6128/MUM/2018

SHRI SANJAY SHANTILAL JAIN ITA No.6140,6125,6126,6127,6127,6128/MUM/2018 later on. Out of the total consideration of Rs. 10.05 crores, a sum of on. Out of the total consideration of Rs. 10.05 crores, a sum of on. Out of the total consideration of Rs. 10.05 crores, a sum of Rs. 6.21 crores were to be borne by the assessee and the balance Rs. 6.21 crores were to be borne by the assessee and the balance Rs. 6.21 crores were to be borne by the assessee and the balance Rs.3.84 crores was to be borne /arranged by his friend. The ld. was to be borne /arranged by his friend. The ld. was to be borne /arranged by his friend. The ld. Counsel further emphasized that even the Assessing Officer has Counsel further emphasized that even the Assessing Officer has Counsel further emphasized that even the Assessing Officer has accepted that Rs. 3.84 crores is accepted that Rs. 3.84 crores is appearing against the name of Mr. appearing against the name of Mr. Jitu Sai at page no. 3 of Annexure A Jitu Sai at page no. 3 of Annexure A-3 seized in the course of search 3 seized in the course of search when read with the MOU entered into between the said Mr. read with the MOU entered into between the said Mr. read with the MOU entered into between the said Mr. G.M.Kakde, the assessee and Mr. Jitendra Jain G.M.Kakde, the assessee and Mr. Jitendra Jain. It was agreed . It was agreed that in absence of possession of flat within a period of 24 months from the absence of possession of flat within a period of 24 months from the absence of possession of flat within a period of 24 months from the execution of the MOU dated execution of the MOU dated 05.10.2010, the assessee and his friend , the assessee and his friend shall be entitled to interest at the rate of 15% p.a. on the amount paid shall be entitled to interest at the rate of 15% p.a. on the amount paid shall be entitled to interest at the rate of 15% p.a. on the amount paid to the builder. The ld. Counsel explaine to the builder. The ld. Counsel explained that the noting found in the d that the noting found in the course of search relate to these calculations and that since the course of search relate to these calculations and that since the course of search relate to these calculations and that since the possession in relation to 5 possession in relation to 5th, 6th and 7th floor could not be obtained, floor could not be obtained, none of the investors turned up for making investments and none of the investors turned up for making investments and none of the investors turned up for making investments and accordingly these are mere pr accordingly these are mere proposals and not that any loans are given oposals and not that any loans are given and interest has been earned. and interest has been earned.

SHRI SANJAY SHANTILAL JAIN ITA No.6140,6125,6126,6127,6127,6128/MUM/2018

SHRI SANJAY SHANTILAL JAIN ITA No.6140,6125,6126,6127,6127,6128/MUM/2018 Counsel that merely because a seized material could not be explained Counsel that merely because a seized material could not be explained Counsel that merely because a seized material could not be explained in the course of search, h in the course of search, he cannot be fastened with the tax liability e cannot be fastened with the tax liability altogether ignoring his explanations given in the course of assessment altogether ignoring his explanations given in the course of assessment altogether ignoring his explanations given in the course of assessment proceedings. We find that the assessee has placed on record the MOU proceedings. We find that the assessee has placed on record the MOU proceedings. We find that the assessee has placed on record the MOU dated 05.10.2010 entered between the assessee, his friend Mr. entered between the assessee, his friend Mr. entered between the assessee, his friend Mr. Jitendra Jain and Mr G.M. Kakde for the possession of 5 in and Mr G.M. Kakde for the possession of 5 in and Mr G.M. Kakde for the possession of 5th, 6th and 7th floor for an area of 15000 sq ft. The Assessing Officer has not made floor for an area of 15000 sq ft. The Assessing Officer has not made floor for an area of 15000 sq ft. The Assessing Officer has not made any enquiries in the matter whereas the MOU is duly signed by all the any enquiries in the matter whereas the MOU is duly signed by all the any enquiries in the matter whereas the MOU is duly signed by all the parties. The claim of the assesee claim of the assesee that the possession of 5 that the possession of 5th, 6th and 7th floor is not given by Mr. G.M. Kakde floor is not given by Mr. G.M. Kakde also needs verification needs verification. The presumption u/s section 132(4A) of the Act are rebuttable section 132(4A) of the Act are rebuttable section 132(4A) of the Act are rebuttable presumptions. Once the assessee has given explanations along with . Once the assessee has given explanations along with . Once the assessee has given explanations along with the MOU and the commencem nd the commencement certificate, the onus shifts to the , the onus shifts to the assessing Officer to verify those facts and decide the issue in the light assessing Officer to verify those facts and decide the issue in the light assessing Officer to verify those facts and decide the issue in the light of verification. Hence, Hence, the noting in the seized material in the seized material need further verification at the end of the Assessing officer in the light of the MOU verification at the end of the Assessing officer in the light of the MO verification at the end of the Assessing officer in the light of the MO and commencement certificate filed by the assessee certificate filed by the assessee. The Assessing Officer shall be at liberty to carry out any enquiry which deemed fit in Officer shall be at liberty to carry out any enquiry which deemed fit in Officer shall be at liberty to carry out any enquiry which deemed fit in SHRI SANJAY SHANTILAL JAIN ITA No.6140,6125,6126,6127,6127,6128/MUM/2018 the facts and circumstances including directing the assessee to the facts and circumstances including directing the assessee to the facts and circumstances including directing the assessee to produce the concerned parties for verification . the concerned parties for verification . Accordingly, ground cordingly, ground no. 3 and 4 of the appeal are allowed no. 3 and 4 of the appeal are allowed for statistical purposes for statistical purposes.

SHRI SANJAY SHANTILAL JAIN ITA No.6140,6125,6126,6127,6127,6128/MUM/2018

SHRI SANJAY SHANTILAL JAIN ITA No.6140,6125,6126,6127,6127,6128/MUM/2018 was to make the payment either was to make the payment either in cash or cheque. However, it is the in cash or cheque. However, it is the contention of the ld. Counsel of the assessee that no cash of Rs. contention of the ld. Counsel of the assessee that no cash of Rs. contention of the ld. Counsel of the assessee that no cash of Rs. 3,71,00,000/- is paid at all as alleged by the revenue and only is paid at all as alleged by the revenue and only is paid at all as alleged by the revenue and only cheques aggregating to Rs. 2,50,00,000/ cheques aggregating to Rs. 2,50,00,000/- is paid. On proper is paid. On proper appreciation of the materia the material, we are of the view that from the entries we are of the view that from the entries recorded, itis inferred either enter amount of recorded, itis inferred either enter amount of ₹ 6, 21, 00, 6, 21, 00, 000/- has been paid or payable been paid or payable. Once , the assessee is accepting part of the . Once , the assessee is accepting part of the payment as paid ( by cheue) , there is no reason, why the balance payment as paid ( by cheue) , there is no reason, why the balance payment as paid ( by cheue) , there is no reason, why the balance part of the amount might not be treated as paid. The assessee has not the amount might not be treated as paid. The assessee has not the amount might not be treated as paid. The assessee has not brought on record any evidence to rebut the presumption that brought on record any evidence to rebut the presumption that brought on record any evidence to rebut the presumption that balance amount has also been paid. balance amount has also been paid. since the assessee has since the assessee has not been able to demonstrate source of balance amount of Rs. 3,71,00,000/ of balance amount of Rs. 3,71,00,000/- therefore the finding of the Ld. CIT(A) on the issue in dispute are therefore the finding of the Ld. CIT(A) on the issue in dispute are therefore the finding of the Ld. CIT(A) on the issue in dispute are justified. Accordingly, the ground no. 5 is dismissed. . Accordingly, the ground no. 5 is dismissed. . Accordingly, the ground no. 5 is dismissed.

SHRI SANJAY SHANTILAL JAIN ITA No.6140,6125,6126,6127,6127,6128/MUM/2018 decided in decided in ITA no. 6123/Mum/2018 in assessee’s own case for A.Y. in assessee’s own case for A.Y. 2010-11 while deciding ground no. 3 deciding ground no. 3, which shall mutatis mutandis which shall mutatis mutandis apply in this case also as the facts are identical. Accordingly, since apply in this case also as the facts are identical. Accordingly, apply in this case also as the facts are identical. Accordingly, the Assessing Officer has not considered the Cash Flow of the Assessing Officer has not considered the Cash Flow of the Assessing Officer has not considered the Cash Flow of unaccounted income and expenditure submitted by the assessee, this unaccounted income and expenditure submitted by the assessee, this unaccounted income and expenditure submitted by the assessee, this issue is also restored d to the file of the Assessing Officer. to the file of the Assessing Officer.

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SHRI SANJAY SHANTILAL JAIN ITA No.6140,6125,6126,6127,6127,6128/MUM/2018

2. The Ld. CIT(A) erred in facts and law in upholding the addition of interest 2. The Ld. CIT(A) erred in facts and law in uphold ing the addition of interest amounting to Rs. 57.37.500/- on the alleged advance given of Rs. amounting to Rs. 57.37.500/ on the alleged advance given of Rs. 3,82.50,000/- in AY. 2011 in AY. 2011-12 without appreciating the true contents and 12 without appreciating the true contents and substance of the loose papers and completely ignoring the evidences and substance of the loose papers and completely ignoring the evidences and substance of the loose papers and completely ignoring the evidences and explanations placed on record. d on record. 3. The Ld. CIT(A) erred in facts and law in upholding the addition of 3. The Ld. CIT(A) erred in facts and law in upholding the addition of 3. The Ld. CIT(A) erred in facts and law in upholding the addition of unaccounted interest payment of Rs. 13.10.367/- unaccounted interest payment of Rs. 13.10.367/ as unexplained expenditure u/s. 69C of the Act on the alleged cash loan taken of Rs. expenditure u/s. 69C of the Act on the alleged cash loan taken of Rs. expenditure u/s. 69C of the Act on the alleged cash loan taken of Rs. 1,10,00,000/- and not taking the wholist and not taking the wholistic view of the matter ic view of the matter 4. The Ld. CIT(A) erred in facts and law in upholding the addition of 4. The Ld. CIT(A) erred in facts and law in upholding the addition of 4. The Ld. CIT(A) erred in facts and law in upholding the addition of unsecured loan taken from various parties aggregating to Rs. 1,50,00,000/ unsecured loan taken from various parties aggregating to Rs. 1,50,00,000/- unsecured loan taken from various parties aggregating to Rs. 1,50,00,000/ as unexplained cash credit u/s. 68 of the Act. as unexplained cash credit u/s. 68 of the Act. 5. All the above grounds are independent and without prejudice to 5. All the above grounds are independent a nd without prejudice to each other. 6. Your appellant craves leave to add, offler, cxeind, late modify any or all 6. Your appellant craves leave to add, offler, cxeind, late modify any or all 6. Your appellant craves leave to add, offler, cxeind, late modify any or all the grounds of appeal ds of appeal.

SHRI SANJAY SHANTILAL JAIN ITA No.6140,6125,6126,6127,6127,6128/MUM/2018

the decision which will be taken in assessment year 2011 the decision which will be taken in assessment year 2011 the decision which will be taken in assessment year 2011-12. This ground of the appeal of the assessee is also allowed for statistical ground of the appeal of the assessee is also allowed for statistical ground of the appeal of the assessee is also allowed for statistical purposes.

Assessing Officer has dealt the addition in para 9 of the assessment Assessing Officer ha s dealt the addition in para 9 of the assessment order. The relevant finding of the Assessing Officer is reproduced as order. The relevant finding of the Assessing Officer is reproduced as order. The relevant finding of the Assessing Officer is reproduced as under:

The assessee has shown the following loans received during The assessee has shown the following loans received during the year. The assessee has shown the following loans received during Name of the party Amount (Rs.) Jitendra jain 10000000 Rajesh Jain HUF 1100000 L S Jain 700000 Sanjeev Jain 800000 Amit jain 2000000 Babulal Shah 400000 Total 15000000

The assessee has not submitted any documents to establish genuineness The assessee has not submitted any documents to establish genuineness of The assessee has not submitted any documents to establish genuineness fan except confirmation of the party. The assessee has submitted fan except confirmation of the party The assessee has submitted confirmation of the party only without any supporting documents. As per confirmation of the party only without any supporting documents. As per confirmation of the party only without any supporting documents. As per the provisions of section 68 at the Income Tax Act, onus is on the assessee the provisions of section 68 at the Income Tax Act, onus is on the assessee the provisions of section 68 at the Income Tax Act, onus is on the assessee to explain cash credit appearing in his books of accounts. As per the to explain cash credit appearing books of accounts. As per the provisions of section 68 of the Income Tax Act that is to establish identity of provisions of section 68 of the Income Tax Act that is to establish identity of provisions of section 68 of the Income Tax Act that is to establish identity of the party, genuineness of transaction and creditworthiness of the party. the party, genuineness of transaction and creditworthiness of the party. the party, genuineness of transaction and creditworthiness of the party. The assessee failed to offer any explanation at all on this liability as The assessee failed to offer any explanation at all on this liability as The assessee failed to offer any explanation at all on this liability as appearing in his balance sheet. The Hon'ble Kerala High Court in the case appearing in his balance sheet. The Hon'ble Kerala High Court in the case appearing in his balance sheet. The Hon'ble Kerala High Court in the case of M/s. Diza Holdings Pvt. Ltd 120 Taxmann 539 has held as under of M/s. Diza Holdings Pvt. Ltd 120 Taxmann 539 has held as under: of M/s. Diza Holdings Pvt. Ltd 120 Taxmann 539 has held as under On the terms of section 66, the burden is on the assesse to offer a On the terms of section 66, the burden is on the assesse to offer a On the terms of section 66, the burden is on the assesse to offer a satisfactory explanation about the nahare and so satisfactory explanation about the nahare and source of the amount wed urce of the amount wed in the books of the asset is also clear that the mere mishing of particular is in the books of the asset is also clear that the mere mishing of particular is in the books of the asset is also clear that the mere mishing of particular is not enough. The mere fact that payment is by way of account payor not enough. The mere fact that payment is by way of account payor not enough. The mere fact that payment is by way of account payor cheque is also not conclusive Therefore, the Assessing Officer was added cheque is also not conclusive Therefore, the Assessing Officer was added cheque is also not conclusive Therefore, the Assessing Officer was added to consider whether notwithstanding the fact that the payments were not ther notwithstanding the fact that the payments were not ther notwithstanding the fact that the payments were not SHRI SANJAY SHANTILAL JAIN ITA No.6140,6125,6126,6127,6127,6128/MUM/2018 made by the ques, whether the assessee had satisfactionly explained the ques, whether the assessee had satisfactionly explained the ques, whether the assessee had satisfactionly explained the nature and source of the amounts found credited in the books of the nature and source of the amounts found credited in the books of the nature and source of the amounts found credited in the books of the assessee. The Assessing Officer was satisfied that the so-called assessee. The Assessing Officer was satisfied that the so assessee. The Assessing Officer was satisfied that the so depositors did not have that r did not have that resources to make such deposits. esources to make such deposits. The assessee has claimed loan of Rs.1,50,00,000/ from the above parties. The assessee has claimed loan of Rs.1,50,00,000/ from the above parties. The assessee has claimed loan of Rs.1,50,00,000/ from the above parties. But except for confirmation letter, no other evidences are furnished to But except for confirmation letter, no other evidences are furnished to But except for confirmation letter, no other evidences are furnished to establish genuineness of loan and creditworthiness of the party As held by establish genuineness of loan and creditworthiness of the party As held by the Hon'ble Supreme Court in the case of Durga Prasad More reported in 82 the Hon'ble Supreme Court in the case of Durga Prasad More reported in 82 the Hon'ble Supreme Court in the case of Durga Prasad More reported in 82 ITR, such documents are self serving documents unless they are supported ITR, such documents are self serving documents unless they are supported ITR, such documents are self serving documents unless they are supported by evidences. Hence, the assessee failed to satisfactorily explain l by evidences. Hence, the assessee failed to satisfactorily explain loan of by evidences. Hence, the assessee failed to satisfactorily explain l Rs.1,50,00,000/+ taken from the above parties within the meaning of Rs.1,50,00,000/+ taken from the above parties within the meaning of Rs.1,50,00,000/+ taken from the above parties within the meaning of section 68 of the Income Tax Act. Hence, this amount is added u/s.68 of the section 68 of the Income Tax Act. Hence, this amount is added u/s.68 of the section 68 of the Income Tax Act. Hence, this amount is added u/s.68 of the Income Tax Act. Penalty proceedings is initiated u/s.271(1)(c) of the Income Income Tax Act. Penalty proceedings is initiated u/s.271(1)(c) of the Income Income Tax Act. Penalty proceedings is initiated u/s.271(1)(c) of the Income Tax Act for furnishing inaccurate particulars of income. Tax Act for furnishing inacc 38. We have heard rival submission of the parties on the issue in e have heard rival submission of the parties on the issue in e have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that dispute and perused the relevant material on record. We find that dispute and perused the relevant material on record. We find that this is the year of unabated assessment as limitation for issuing this is the year of unabated assessment as limitation for issuing this is the year of unabated assessment as limitation for issuing notice under section 143(2) o ce under section 143(2) of the Act already expired as on the date ct already expired as on the date of the search and therefore no addition could have been made qua of the search and therefore no addition could have been made qua of the search and therefore no addition could have been made qua the issue in dispute without any incriminating material found in the issue in dispute without any incriminating material found in the issue in dispute without any incriminating material found in seized from the premises of the assessee. On perusal of om the premises of the assessee. On perusal of om the premises of the assessee. On perusal of the assessment order, we do not find any reference of any incriminating assessment order, we do not find any reference of any incriminating materials for making this addition of unexplained cash credit under materials for making this addition of unexplained cash credit under materials for making this addition of unexplained cash credit under section 68 of the Act. Identical addition has been deleted by us in ct. Identical addition has been deleted by us in ct. Identical addition has been deleted by us in assessment year 2011-12, following the finding of the Hon’ble assessment year 2011 12, following the finding of the Hon’ble

SHRI SANJAY SHANTILAL JAIN ITA No.6140,6125,6126,6127,6127,6128/MUM/2018

Bombay High Court in the case of Continental warehousing urt in the case of Continental warehousing urt in the case of Continental warehousing Corporation (supra). Following our finding in assessment year 2011 (supra). Following our finding in assessment year 2011 (supra). Following our finding in assessment year 2011- 12, the addition made under section 68 of the A n made under section 68 of the Act in case of n made under section 68 of the A unabated assessment without any incriminating material qua the unabated assessment without any incriminating material qua the unabated assessment without any incriminating material qua the issue in dispute, is d , is deleted. The ground of the appeal is appeal is accordingly allowed.

1 On facts and circumstances of the case, the Ld CIT(A)- 1 On facts and circumstance -50, Mumbai erred in not holding that the order passed u/s 143(3) r.ws. 153A by the DCIT CC in not holding that the order passed u/s 143(3) r.ws. 153A by the DCIT CC- in not holding that the order passed u/s 143(3) r.ws. 153A by the DCIT CC 8(3), Mumbai ("Assessing Officer) is without jurisdiction, invalid and bad in 8(3), Mumbai ("Assessing Officer) is without jurisdiction, invalid and bad in law (b) The Ld. CIT(A) has grossly erred in facts and law in not appreciating law (b) The Ld. CIT(A) has grossly erred in facts and law in not appreciating law (b) The Ld. CIT(A) has grossly erred in facts and law in not appreciating the explanations and material placed on record as well as true content of the explanations and material placed on record as well as true content of the explanations and material placed on record as well as true content of the seized material and taking the wholistic view o the seized material and taking the wholistic view of the matter by the seized material and taking the wholistic view o telescoping the real income of the assessee telescoping the real income of the assessee 2. The Ld. CIT(A) erred in facts and law in upholding the addition of interest 2. The Ld. CIT(A) erred in facts and law in upholding the addition of interest 2. The Ld. CIT(A) erred in facts and law in upholding the addition of interest amounting to Rs. 32.35,313/ on the alleged advance given of Rs. amounting to Rs. 32.35,313/ on the alleged advance given of Rs. amounting to Rs. 32.35,313/ on the alleged advance given of Rs. 3,82,50,000/- in AY 2011 in AY 2011-12 without appreciating the) true contents and substance of the loose papers and completely ignoring the evidences and substance of the loose papers and completely ignoring the evidences and substance of the loose papers and completely ignoring the evidences and explanations placed on record explanations placed on record

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3. The Ld. CIT(A) erred in facts and law in upholding the addition of 3. The Ld. CIT(A) erred in facts and law in upholding the addition of 3. The Ld. CIT(A) erred in facts and law in upholding the addition of unaccounted interest payment of Rs. 39.000/- as unexplained expen unaccounted interest payment of Rs. 39.000/ as unexplained expenditure u/s. 69C of the Act on the alleged cash loan taken of Rs. 1,10,00,000/ u/s. 69C of the Act on the alleged cash loan taken of Rs. 1,10,00,000/- and u/s. 69C of the Act on the alleged cash loan taken of Rs. 1,10,00,000/ not taking the wholistic view of the matter not taking the wholistic view of the matter 4. (a) The Ld. CIT(A) erred in facts and law in upholding the addition of Rs. 4. (a) The Ld. CIT(A) erred in facts and law in upholding the addition of Rs. 4. (a) The Ld. CIT(A) erred in facts and law in upholding the addition of Rs. 48.03.763/ as deemed dividend u/s. 2(22)(e) of the Act (b) The Ld. CIT(A) 48.03.763/ as deemed dividend u/s. 2(22)(e) of the Act (b) The Ld. CIT(A) erred in not appreciating the case law of the jurisdictional ITAT in the case erred in not appreciating the case law of the jurisdictional ITAT in the case erred in not appreciating the case law of the jurisdictional ITAT in the case of Advantage Moti (India) P. Ltd. v. ITO (ITA No. 7379/M/2012) relied upon of Advantage Moti (India) P. Ltd. v. ITO (ITA No. 7379/M/2012) relied upon of Advantage Moti (India) P. Ltd. v. ITO (ITA No. 7379/M/2012) relied upon by the assessee. 5. The Ld. CIT(A) erred in facts and law in upholding the addit 5. The Ld. CIT(A) erred in facts and law in upholding the addition of loan 5. The Ld. CIT(A) erred in facts and law in upholding the addit aggregating to Rs. 11,00,000/- as unexplained cash credit u/s. 68 of the aggregating to Rs. 11,00,000/ as unexplained cash credit u/s. 68 of the Act. 6. All the above grounds are independent and without prejudice to each 6. All the above grounds are independent and without prejudice to each 6. All the above grounds are independent and without prejudice to each other 7. Your appellant craves leave to add aller, amend, delete or modify any or 7. Your appellant craves leave to add aller, amend, delete or modify any or 7. Your appellant craves leave to add aller, amend, delete or modify any or all the grounds of appeal

. ds of appeal.

41. We find that ground e find that ground Nos.1 (one) to 3 of the appeal for the year to 3 of the appeal for the year under consideration are identically worded to grounds of the appeal under consideration are identically worded to grounds of the appeal under consideration are identically worded to grounds of the appeal of the assessee for assessment year 2012-13 except change of of the assessee for assessment year 2012 13 except change of amount, therefore following our finding in assessment year 2012 amount, therefore following our finding in as sessment year 2012-13, the ground No. one to 3 of the appeal are decided mutasis mutandis. the ground No. one to 3 of the appeal are decided mutasis mutandis. the ground No. one to 3 of the appeal are decided mutasis mutandis. The ground No 1(a) is accordingly dismissed whereas ground The ground No 1(a) is accordingly dismissed whereas ground The ground No 1(a) is accordingly dismissed whereas ground numbers 1(b) to 3 of the appeal are allowed for statistical purposes. 1(b) to 3 of the appeal are allowed for statistical purposes. 1(b) to 3 of the appeal are allowed for statistical purposes.

42. The ground No. four of the appeal relates to addition of deemed The ground No. four of the appeal relates to addition of deemed The ground No. four of the appeal relates to addition of deemed dividend of ₹ 40, 03, 763/ 40, 03, 763/-.

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satisfied in the case of the assessee and therefore he upheld the satisfied in the case of the assessee and therefore he upheld the satisfied in the case of the assessee and therefore he upheld the addition made by the Assessing Officer observing as under: addition made by the Assessing Officer observing as under: addition made by the Assessing Officer observing as under:

18.3 The Hon'ble Supreme Court in Navnit Lal C. Jhaveri v. K.K. Sen [1965] 18.3 The Hon'ble Supreme Court in Navnit Lal C. Jhaveri v. K.K. Sen [1965] 56 ITR 198has noted that there could be three kinds of payments, L.e. (a) 56 ITR 198has noted that there could be three kinds of payments, L.e. (a) 56 ITR 198has noted that there could be three kinds of payments, L.e. (a) payments made to the shareholder by a company by way of advance or payments made to the shareholder by a company by way of advance or payments made to the shareholder by a company by way of advance or loan; (b) payments made on behalf of the assessee and (c) payments made loan; (b) payments made on behalf of the assessee and (c) payments made loan; (b) payments made on behalf of the assessee and (c) payments made for the benefit of the assessee. The Hon'ble Apex Court then analyzed the fit of the assessee. The Hon'ble Apex Court then analyzed the fit of the assessee. The Hon'ble Apex Court then analyzed the parimateria provision and said that 5 conditions are to be met for its parimateria provision and said that 5 conditions are to be met for its parimateria provision and said that 5 conditions are to be met for its applicability, firstly that the company should be one in which the public is applicability, firstly that the company should be one in which the public is applicability, firstly that the company should be one in which the public is not interested within the meaning of the expression in law, in the year in not interested within the meaning of the expre ssion in law, in the year in which loan is Secondly, the buyer should be a shareholder at the date which loan is Secondly, the buyer should be a shareholder at the date which loan is Secondly, the buyer should be a shareholder at the date when the loan was advanced regardless of the extent of shareholding. when the loan was advanced regardless of the extent of shareholding. when the loan was advanced regardless of the extent of shareholding. Thirdly, the loan to the shareholder by the company can be deemed to be Thirdly, the loan to the shareholder by the company can be deemed to be Thirdly, the loan to the shareholder by the company can be deemed to be dividend only to the extent to which it is shown that the company the extent to which it is shown that the company the extent to which it is shown that the company possessed accumulated profit at the date of the loan; fourthly, the loan possessed accumulated profit at the date of the loan; fourthly, the loan possessed accumulated profit at the date of the loan; fourthly, the loan should not be advanced by the company in its course of business and lastly should not be advanced by the company in its course of business and lastly should not be advanced by the company in its course of business and lastly that the loan should remain outstanding at the instance of that the loan should remain outstanding at the instance of the shareholder's that the loan should remain outstanding at the instance of previous year in relation to the concerned assessment year The Supreme previous year in relation to the concerned assessment year The Supreme previous year in relation to the concerned assessment year The Supreme Court also clarified the fourth condition by importantly holding that in other Court also clarified the fourth condition by importantly holding that in other Court also clarified the fourth condition by importantly holding that in other words, this provision would not apply to cases where the company which words, this provision would not apply to cases where the company which words, this provision would not apply to cases where the company which advances the loan to its shareholder carries on the business of n to its shareholder carries on the business of money n to its shareholder carries on the business of lending itself 18.4 I have noted that all the 5 conditions, as mandated by the Hon'ble 18.4 I have noted that all the 5 conditions, as mandated by the Hon'ble 18.4 I have noted that all the 5 conditions, as mandated by the Hon'ble Supreme court are satisfied in the present case 18.5 The Supreme Court in Supreme court are satisfied in the present case 18.5 The Supreme Court in Supreme court are satisfied in the present case 18.5 The Supreme Court in the case of P.K. Badiani v. CIT [1976] 105 ITR 642 has held that the term the case of P.K. Badiani v. CIT [1976] 5 ITR 642 has held that the term 'profits' appearing in section 2(6A)(e) of the Indian Income 'profits' appearing in section 2(6A)(e) of the Indian Income-tax Act, 1922, 'profits' appearing in section 2(6A)(e) of the Indian Income which corresponds to section 2(22)(e) of the 1961 Act, means profits in the which corresponds to section 2(22)(e) of the 1961 Act, means profits in the which corresponds to section 2(22)(e) of the 1961 Act, means profits in the commercial sense, Le, profits made by the company in the usual and true commercial sense, Le, profits made by the company in the usual and true commercial sense, Le, profits made by the company in the usual and true sense of the term. 18.6 In the case of Smt. TarulataShyam v. CIT [1977] 108 ITR 345 (SC), the 18.6 In the case of Smt. TarulataShyam v. CIT [1977] 108 ITR 345 (SC), the 18.6 In the case of Smt. TarulataShyam v. CIT [1977] 108 ITR 345 (SC), the Hon'ble Supreme Court had held that the position reflected in the books at Hon'ble Supreme Court had held that the position reflected in the books at Hon'ble Supreme Court had held that the position reflected in the books at the end of the year is not conclusive and that if funds are actually given by the end of the year is not conclusive and that if funds are actually given by the end of the year is not conclusive and that if funds are actually given by the company to its shareholder, which answers the description under the any to its shareholder, which answers the description under the any to its shareholder, which answers the description under the provision, it would be treated as "deemed dividend" to say that similarly provision, it would be treated as "deemed dividend" to say that similarly provision, it would be treated as "deemed dividend" to say that similarly

SHRI SANJAY SHANTILAL JAIN ITA No.6140,6125,6126,6127,6127,6128/MUM/2018 loans camouflaged as trading advances fall within the mischief of "deemed loans camouflaged as trading advances fall within the mischief of "deemed loans camouflaged as trading advances fall within the mischief of "deemed dividend" provision. 18.7 In CIT v. Sunil Chopra [2011] 12 taxmann.com 496/201 Taxman 316 18.7 In CIT v. Sunil Ch opra [2011] 12 taxmann.com 496/201 Taxman 316 (Delhi), the Hon'ble Delhi High Court has held that the true nature of a (Delhi), the Hon'ble Delhi High Court has held that the true nature of a (Delhi), the Hon'ble Delhi High Court has held that the true nature of a transaction, discerned by the AO needs to be upheld and the ITAT's transaction, discerned by the AO needs to be upheld and the ITAT's transaction, discerned by the AO needs to be upheld and the ITAT's reasoning was set aside. reasoning was set aside.

18.8 In the case of Miss P. Sarada Vs CIT, 229 ITR 444(SC), the Hon'ble 18.8 In the case of Miss P. Sarada Vs CIT, 2 29 ITR 444(SC), the Hon'ble Supreme Court has held that advances made by company to assessee Supreme Court has held that advances made by company to assessee Supreme Court has held that advances made by company to assessee would have to be treated as deemed dividends paid on dates when would have to be treated as deemed dividends paid on dates when would have to be treated as deemed dividends paid on dates when withdrawals were allowed to be made and subsequent adjustment of withdrawals were allowed to be made and subsequent adjustment of withdrawals were allowed to be made and subsequent adjustment of account made on very last day of accounting year would not alter position account made on very last day of a ccounting year would not alter position that assessee received notional dividends on various dates. that assessee received notional dividends on various dates. that assessee received notional dividends on various dates. 18.9 I have noted that the appellant has taken loan from M/s Abhushan 18.9 I have noted that the appellant has taken loan from M/s Abhushan 18.9 I have noted that the appellant has taken loan from M/s Abhushan Ornaments Pvt Ltd, and said loans attract the provisions of section 2(22) (e) Ornaments Pvt Ltd, and said loans attract the provisions of section 2(22) (e) Ornaments Pvt Ltd, and said loans attract the provisions of section 2(22) (e) of the Act In view of these facts and circumstances of the case and the ct In view of these facts and circumstances of the case and the ct In view of these facts and circumstances of the case and the various judicial decisions cited above, the Ground of Appeal

No. 5 of the various judicial decisions cited above, the Ground of Appeal No. 5 of the various judicial decisions cited above, the Ground of Appeal No. 5 of the present appeal is dismissed. present appeal is dismissed.

45. Before us, the learned Before us, the learned Counsel of the assessee referred to of the assessee referred to a copy of assessee’s ledger account r account in the books of the company the books of the company, placed on page 34 to 36 of the paperbook and submitted that there are page 34 to 36 of the paperbook and submitted that there are page 34 to 36 of the paperbook and submitted that there are instances where amount has been advanced by the assessee over and instances where amount has been advanced by the assessee over and instances where amount has been advanced by the assessee over and above the outstanding balances above the outstanding balances as standing in the books of the said standing in the books of the said company and the extra amount received he extra amount received by the company from the company from the assessee was utilized utilized for meeting working capital requirement. for meeting working capital requirement. Before us the learned Counsel Counsel of the assessee submitted submitted that the SHRI SANJAY SHANTILAL JAIN ITA No.6140,6125,6126,6127,6127,6128/MUM/2018 transactions has resulted in the mutual benefit to the assessee as transactions has resulted in the mutual benefit to the assessee as transactions has resulted in the mutual benefit to the assessee as well as to the company by assisting each other in their working he company by assisting each other in their working he company by assisting each other in their working capital needs, and therefore in such a scenario the dimming fiction of capital needs, and therefore in such a scenario the dimming fiction of capital needs, and therefore in such a scenario the dimming fiction of section 2(22)€ should not be invoked. In support of the contention, he € should not be invoked. In support of the contention, he € should not be invoked. In support of the contention, he relied on the decision of the Coordinate Bench of the Tribunal in the relied on the decision of the Coordinate Bench of the T relied on the decision of the Coordinate Bench of the T case of ITO Vs Sm case of ITO Vs Smt Gayatri Chakraborty (Kolkatta t Gayatri Chakraborty (Kolkatta) in wherein it has been held as under: 151/Kol/2013, wherein it has been held as under:

"It is pertinent to note here that when dividends are declared by a company, "It is pertinent to note here that when dividends are declared by a company, "It is pertinent to note here that when dividends are declared by a company, it is solely the shareholders who benefit from the transaction. No benefits it is solely the shareholders who benefit from the transaction. No benefits accrue to the company by way of dividend distribution. Thus, section 2(22) accrue to the company by way of dividend distribution. Thus, section 2(22) accrue to the company by way of dividend distribution. Thus, section 2(22) (e) of the Act covers only such situations, where the shareholder alone (e) of the Act covers only such situations, where the shareholder alone (e) of the Act covers only such situations, where the shareholder alone benefits from the loan transaction, because if the company also benefits benefits from the loan transaction, because if the company also benefits benefits from the loan transaction, because if the company also benefits from the said transaction, it will fake the character of a commercial id transaction, it will fake the character of a commercial id transaction, it will fake the character of a commercial transaction and hence will not qualify to be dividend. In the case of the transaction and hence will not qualify to be dividend. In the case of the transaction and hence will not qualify to be dividend. In the case of the assessee, by giving and taking financial assistance from each other, both assessee, by giving and taking financial assistance from each other, both assessee, by giving and taking financial assistance from each other, both the assessee and the company were benefited and s the assessee and the company were benefited and such transactions the assessee and the company were benefited and s between them were nothing but commercial IT(SS)A No.60 between them were nothing but commercial IT(SS)A No.60-62 & 73- between them were nothing but commercial IT(SS)A No.60 76/KoV/2011 A. Ys.06-07 to 08-09 and 02-03 to 05-06 Mr. Purushoffam 76/KoV/2011 A. Ys.06 06 Mr. Purushoffam Das Mimani. v. DCIT CC-V Kol Page 5 fransactions and dividend Das Mimani. v. DCIT CC V Kol Page 5 fransactions and dividend attributable to the shareholder is nothing to do with such business attributable to the shareholder is nothing to do with such business transaction. From the above discussions it can be said that sec. 2(22)(e) of transaction. From the above discussions it can be said that sec. 2(22)(e) of transaction. From the above discussions it can be said that sec. 2(22)(e) of the Act covers only those transactions which benefit the shareholder alone the Act covers only those transactions which benefit the shareholder alone the Act covers only those transactions which benefit the shareholder alone and results in no benefit to the company. On the other hand, if the and results in no benefit to the company. On the other hand, if the and results in no benefit to the company. On the other hand, if the transaction is mutual by which both sides are benefited, it is undoubtedly mutual by which both sides are benefited, it is undoubtedly mutual by which both sides are benefited, it is undoubtedly outside the purview of provisions of sec. 2(22)(e) of the Act. From the above, outside the purview of provisions of sec. 2(22)(e) of the Act. From the above, outside the purview of provisions of sec. 2(22)(e) of the Act. From the above, it is clear that the loan account differs from current account and the it is clear that the loan account differs from current account and the it is clear that the loan account differs from current account and the provisions of section 2(22)(e) of the Act, being a deeming section, cannot be provisions of section 2(22)(e) of the Act, be ing a deeming section, cannot be applied to current account. In such circumstances, we delete the addition applied to current account. In such circumstances, we delete the addition applied to current account. In such circumstances, we delete the addition and this common issue of assessee's appeals is allowed." and this common issue of assessee's appeals is allowed." and this common issue of assessee's appeals is allowed."

SHRI SANJAY SHANTILAL JAIN ITA No.6140,6125,6126,6127,6127,6128/MUM/2018

SHRI SANJAY SHANTILAL JAIN ITA No.6140,6125,6126,6127,6127,6128/MUM/2018 to the company cannot be termed as capital contribution. The issue to the company cannot be termed as capital contribution. The issue in dispute before us is regarding the advances which have been in dispute before us is regarding the advances which have been in dispute before us is regarding the advances which have been received by the assessee for which assessee has not substantiated received by the assessee for which assessee has not substantiated received by the assessee for which assessee has not substantiated whether those advances were for purpose of the business of the whether those advances purpose of the business of the company. In the absence of any such documentary evidence, the company. In the absence of any such doc umentary evidence, the loans and advances are liable to be considered as deemed dividend loans and advances are liable to be considered as deemed dividend loans and advances are liable to be considered as deemed dividend within the provision of section 2(22)(e) of the A the provision of section 2(22)(e) of the Act. As regard to the ct. As regard to the contention of accumulated profit is concerned, the assessee has contention of accumulated profit is concerned, the assessee has contention of accumulated profit is concerned, the assessee has referred to the decision of the Tribunal Coordinate B referred to the decision of the ribunal Coordinate Bench in the case Advantage Advantage Advantage Moti Moti Moti (India) (India) (India) P P P Ltd Ltd Ltd Vs Vs Vs ITO ITO ITO in in in ITA ITA ITA No. No. No. of 7379/Mum/2012 wherein it is held that for the purpose of deem wherein it is held that for the purpose of deemed wherein it is held that for the purpose of deem dividend under section 2(22)(e) of the Act the accumulated dividend under section 2(22)(e) of the A accumulated profit of preceding assessment year should be considered and not current preceding assessment year should be considered and not current preceding assessment year should be considered and not current year’s profit. In view of above, the quantification of deemed dividend year’s profit. In view of above, the quantification of deemed dividend year’s profit. In view of above, the quantification of deemed dividend is restored to the file of the Assessing Officer subject to verification of is restored to the file of the subject to verification of accumulated profit in accordance with law . The ground of the accumulated profit in accordance wi The ground of the appeal of the assessee is accordingly partly allowed for statistical appeal of the assessee is accordingly partly allowed for statistical appeal of the assessee is accordingly partly allowed for statistical purposes.

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the Assessing Officer relying on various decisions cited in the the Assessing Officer relying on va rious decisions cited in the improved assessment order. improved assessment order.

SHRI SANJAY SHANTILAL JAIN ITA No.6140,6125,6126,6127,6127,6128/MUM/2018 by the lower authoriti authorities in the impugned orders shows that assessee es in the impugned orders shows that assessee was engaged in business activity for which maintenance of was engaged in business activity for which maintenance of books of accounts was required required. In assessment year 2011- -12, the assessee himself has admitted the entries recorded in seized document admitted the entries recorded in seized document admitted the entries recorded in seized document are of In the case of Arun Kumar J purchase and sale of bullion. d sale of bullion. In the case of Muchhala V CIT (2017) 85 taxmann.com 306, the Hon’ble Bombay Muchhala V CIT (2017) 85 taxmann.com 306 he Hon’ble Bombay High Court upheld the ad the addition under section 68 of the A dition under section 68 of the Act even in absence of books of accounts . In the said case also the absence of books of accounts . In the said case also the absence of books of accounts . In the said case also the assessee taken the plea for the first time before the Hon’ble High Court th taken the plea for the first time before the Hon’ble High Court th taken the plea for the first time before the Hon’ble High Court that section 68 was not applicable not applicable. In the instant case also . In the instant case also plea of non- applicability of section 68 has been raised section 68 has been raised first time before the first time before the Tribunal. In the circumstances In the circumstances, we reject this conte we reject this contention of the learned consul of the assessee that no addition could have been consul of the assessee that no addition could have been consul of the assessee that no addition could have been made under section 68 of the Act. We find that assess made under section 68 of the Act. We find that assess made under section 68 of the Act. We find that assessee has not discharged his onus of justifying identity, creditworthiness and discharged his onus of justifying identity, creditworthiness and genuineness in respect of the loan transactions of genuineness in respect of the loan transactions of genuineness in respect of the loan transactions of ₹ 11 lakh, therefore, accordingly we uphold the finding of the accordingly we uphold the finding of the accordingly we uphold the finding of the lower authorities

SHRI SANJAY SHANTILAL JAIN ITA No.6140,6125,6126,6127,6127,6128/MUM/2018 on the issue in dispute. The ground of the appeal of the assessee is on the issue in dispute. The ground of the appeal of the assessee is on the issue in dispute. The ground of the appeal of the assessee is accordingly dismissed accordingly dismissed

1. (a) The Ld CIT(A) erred in facts and law in upholding the addition of 1. (a) The Ld CIT(A) erred in facts and law in upholding the addition of Rs. 1. (a) The Ld CIT(A) erred in facts and law in upholding the addition of 23.30.274/- as deemed dividend u/s 2(22)(e) of the Act. (b) The Ld. CIT(A) as deemed dividend u/s 2(22)(e) of the Act. (b) The Ld. CIT(A) as deemed dividend u/s 2(22)(e) of the Act. (b) The Ld. CIT(A) erred in facts and law in not appreciating the case law of the Hon ble erred in facts and law in not appreciating the case law of the Hon ble erred in facts and law in not appreciating the case law of the Hon ble jurisdictional ITAT in the case of Advantage Mofi (India) P Ltd v ITO (ITA No. jurisdictional ITAT in the case of Advantage Mofi (India) P Ltd v ITO (ITA No. jurisdictional ITAT in the case of Advantage Mofi (India) P Ltd v ITO (ITA No. 7379/M/2012) relied upon by the assessee 7379/M/2012) relied upon by 2. The Ld CIT(A) erred in facts and law in upholding the addition of loan 2. The Ld CIT(A) erred in facts and law in upholding the addition of loan 2. The Ld CIT(A) erred in facts and law in upholding the addition of loan aggregating to Rs. 61.00.000/- as unexplained cash credit u/s 68 of the Act aggregating to Rs. 61.00.000/ as unexplained cash credit u/s 68 of the Act 3. All the above grounds are independent and without prejudice to each 3. All the above grounds are independent and without prejudice to each 3. All the above grounds are independent and without prejudice to each other 4. Your appellant craves leave to add, alter, amend, delete or nt craves leave to add, alter, amend, delete or nt craves leave to add, alter, amend, delete or modify any or all the grounds of appeal

. all the grounds of appeal.

56. The ground No. No. one of the appeal of the assessee is identical to one of the appeal of the assessee is identical to the ground No. four of the appeal for assessment year 2013 the ground No. four of the appeal for assessment year 2013 the ground No. four of the appeal for assessment year 2013-14, therefore following our finding in assessment year 2013 therefore following our finding in assessment year 2013-14, the issue in dispute in the year under consideration is also restored to the file in dispute in the year under consideration is also restored to the file in dispute in the year under consideration is also restored to the file

SHRI SANJAY SHANTILAL JAIN ITA No.6140,6125,6126,6127,6127,6128/MUM/2018 of the Assessing Officer for deciding following our finding in of the Assessing Officer for deciding following our finding in of the Assessing Officer for deciding following our finding in assessment year 2013-14 on the issue in dispute. The ground of the assessment year 2013 The ground of the appeal of the assessee is accordingly allowed party for statistical appeal of the asses see is accordingly allowed party for statistical purposes.

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CIT(A) on the issue in dispute. The ground No. two of the appeal of CIT(A) on the issue in dispute. The ground No. two of the appeal of CIT(A) on the issue in dispute. The ground No. two of the appeal of the assessee is accordingly dismissed. the assessee is accordingly dismissed.

17 Before us, the Ld Counsel of the assessee submitted that there was no 17 Before us, the Ld Counsel of the assessee submitted that there was no 17 Before us, the Ld Counsel of the assessee submitted that there was no material before the Ld Addl/Commissioner of Income tax to substantiate material before the Ld Addl/Commissioner of Income tax to substantiate material before the Ld Addl/Commissioner of Income tax to substantiate that cash loan in reference were exceeding 120,00,000/ that cash loan in reference were exceeding 120,00,000/- and therefore that cash loan in reference were exceeding 120,00,000/ those authorities have levied the penalty mainly on the presumption that those authorities have levied the penalty mainly on the presumption that cash loans are exceeding 120 00,000/- According to the Ld. Counsel it was cash loans are exceeding 120 00,000/ According to the Ld. Counsel it was the onus on the authority who has levied the penalty to establish that loans the onus on the authority who has levied the penalty to establish that loans the onus on the authority who has levied the penalty to establish that loans

SHRI SANJAY SHANTILAL JAIN ITA No.6140,6125,6126,6127,6127,6128/MUM/2018 in question were exceeding 120,00,000/- and therefore, the penalty levied in question were exceeding 120,00,000/ and therefore, the penalty levied is liable to be deleted However, we do not agree with the above contention is liable to be deleted However, we do not agree with the above contention is liable to be deleted However, we do not agree with the above contention of the Ld Counsel of the assessee. The details of the loan entries found of the Ld Counsel of the assessee. The details of the loan entries found of the Ld Counsel of the assessee. The details of the loan entries found during the course of the search have been referred by the Ld CIT(A) in para during the course of the search have been referred by the Ld CIT(A) in para during the course of the search have been referred by the Ld CIT(A) in para 7.1 of the impugned order where each entry is exceeding 120,00,000/ If the 7.1 of the impugned order where each entry is exceeding 120,00,000/ If the assessee was having any evidence that those entries are combined loan assessee was having any evidence that those entries are combined loan assessee was having any evidence that those entries are combined loan having each entry below 120,00,000/- then it was the responsibility of the having each entry below 120,00,000/ then it was the responsibility of the assessee to forward the name and address of the parties along with assessee to forward the name and address of the parties along with assessee to forward the name and address of the parties along with relevant evidences justifying identity, creditworthiness and genuineness of elevant evidences justifying identity, creditworthiness and genuineness of elevant evidences justifying identity, creditworthiness and genuineness of transaction. If the assessee did not provide any details of the entry of loan transaction. If the assessee did not provide any details of the entry of loan transaction. If the assessee did not provide any details of the entry of loan of 198,00,000/- (7,00,000/ (7,00,000/-, €8,00,000/-, 10,00,000/-etc, then the logical etc, then the logical inference is that the amount is unexplained cash credit, which should have inference is that the amount is unexplained cash credit, which should have been assessed u/s 68 of the Act by the Assessing Officer and in that case, been assessed u/s 68 of the Act by the Assessing Officer and in that case, been assessed u/s 68 of the Act by the Assessing Officer and in that case, it is not being explained unsecured loan, having no name and address of it is not being explained unsecured loan, having no name and address of it is not being explained unsecured loan, having no name and address of the of parties, no penalty for violation of 269SS/T can be ini the of parties, no penalty for violation of 269SS/T can be initiated. What is the of parties, no penalty for violation of 269SS/T can be ini beyond the seized record is known to the assessee and therefore, the onus beyond the seized record is known to the assessee and therefore, the onus beyond the seized record is known to the assessee and therefore, the onus in on the assessee to substantiate the same In view of the above in on the assessee to substantiate the same In view of the above in on the assessee to substantiate the same In view of the above discussion, we are of the view that the penalty levied u/s 271D of the Act is discussion, we are of the view that the penalty levied u/s 271D of the Act is discussion, we are of the view that the penalty levied u/s 271D of the Act is not justified. Since the issue of addition of section 68 of the Act in respect of not justified. Since th e issue of addition of section 68 of the Act in respect of amount of unsecured loan claimed by the assessee has already been amount of unsecured loan claimed by the assessee has already been amount of unsecured loan claimed by the assessee has already been restored back restored back to restored back to to the file of the Assessing Officer in the file of the Assessing Officer in the file of the Assessing Officer in No. ITA No. 6123/Mum/2018, while deciding the issue of addition of 16,25,01,000/ 6123/Mum/2018, while deciding the issue of addition of 16,25,01,000/- on 6123/Mum/2018, while deciding the issue of addition of 16,25,01,000/ the basis of pages of seized diary, we feel appropriate to restore this issue the basis of pages of seized diary, we feel appropriate to restore this issue the basis of pages of seized diary, we feel appropriate to restore this issue of levy of penalty u/s 271D of the Act to the file of the Ld. Joint/Addl. of levy of penalty u/s 271D of the Act to the file of the Ld. Joint/Addl. of levy of penalty u/s 271D of the Act to the file of the Ld. Joint/Addl. Commissioner for deciding afresh after adjudication by the Assessing Commissioner for deciding afresh after adjudication by the Assessing Commissioner for deciding afresh after adjudication by the Assessing Officer whether the amount of unsecured loan in consideration is Officer whether the amount of u nsecured loan in consideration is unexplained cash credit or explained unsecured Joan. The grounds of the unexplained cash credit or explained unsecured Joan. The grounds of the unexplained cash credit or explained unsecured Joan. The grounds of the appeal of the assessee are accordingly allowed for statistical purpose. appeal of the assessee are accordingly allowed for statistical purpose. appeal of the assessee are accordingly allowed for statistical purpose.

SHRI SANJAY SHANTILAL JAIN ITA No.6140,6125,6126,6127,6127,6128/MUM/2018

Commissioner of income-tax, having jurisdiction over the Assessing Commissioner of income tax, having jurisdiction over the Assessing Officer. The ground of the appeal of the assessee is accordingly r. The ground of the appeal of the assessee is accordingly r. The ground of the appeal of the assessee is accordingly allowed for statistical purposes. allowed for statistical purposes.

Order pronounced in the open Court in Order pronounced in the open Court in 30/11/2022 2022 Rule 34 (4) of the ITAT Rules, 1963. of the ITAT Rules, 1963.