JAYDEV DEVELOPERS,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-4(2)(1), AHMEDABAD

The Ld. CIT(A) has erred in law and on facts in not appreciating the fact that the net amount of unsecured loan taken from the said company Jain Farms Pvt. Ltd. during the FY 2016-17 is of Rs. 1,19,85,000/- since the loan amount of Rs. 30,15,000/- has been repaid during the same financial year 2016-17 itself. Under the facts and circumstances of the case, the addition of Rs. 1,50,00,000/- confirmed by the Ld. CIT(A) is contrary to the facts available on record.”

The brief facts of the case are that the assessee is a partnership-firm engaged in the business of construction and property development. During the scrutiny assessment proceedings u/s 143(3) of the Income Tax Act, 1961 (in short “the Act”), the Assessing Officer (AO) noted that the assessee-firm had taken unsecured loans from various persons during the Financial Year (FY) 2016-17 relevant to assessment year under consideration AY 2017-18. The AO asked the assessee to furnish the complete details of the persons and to establish the identity and creditworthiness of the creditors and genuineness of the transactions. From the details furnished by the assessee, the AO noted that one of the creditors of the assessee was ‘Jain Farms Private Limited’ . The assessee, during the year under consideration, had taken a loan of Rs.1.50 crores from the said company ‘Jain Farms Private Limited’. However, the closing balance of the loan as on 31/03/2017 was shown as Rs.1,19,85,000/- and no interest was paid on the said amount. The Ld. AO further noted that no Income Tax Return was filed by the said lender- company and further from the bank statement of the said company, the AO noted that there were transfers/credits/deposits on the same date which were then immediately advanced to the assessee-firm, which transactions prima facie appeared suspicious. Having noted the above facts, the AO Jaydev Developers vs. The ITO Asst. Year : 2017-18 carried out field enquiry about the identity of the said company. As per the field enquiry report of the Inspector, he went personally to the available address of the said company and found that there was no such company or office of such company existing on the given address. He also made enquiry from the neighbourhood/surroundings from which it was gathered that no such person/entity was available on the said address. Considering the circumstances, that the said Jain Farms Private Limited had not filed any income-tax return and further it had no office at the given address and its name was also struck off from the